Welcome to LIONTRUST
Current positioning•We see better value in Europe, where stocksare trading at attractive valuations versus the USdue to strong earnings revisions, and the regionis also poised to benefit from a value/cyclicaldriven market.•The UK remains cheap and, more than a yearon from the long-awaited Brexit deal gettingdone, is still a contrarian play despite strongrecovery from the depths of the pandemic.•Emerging markets remain a watchpoint asthe regulatory shift in China has caused a rerating in the region’s stocks, especially in thetechnology sector. This has made emergingmarket companies more attractive on valuationbut they bring added near-term volatility.•We continue to be bullish on the reflation tradethat looks to be gathering pace again after asummer lull.6 - Liontrust Multi-Asset Portfolio Services Quarterly Report: Q4 2021•This plays into three long-term calls: global exUS equities are more attractive than the US,small caps should outperform large, and valueshould outstrip growth.•We appreciate the direction of bond yields willbe upward over time as interest rates rise but, asever, the path will not be linear and we maintainexposure to this asset class for its diversificationto equities, some level of inflation protection andincreasing income.•Amid a weaker few months for bonds as centralbanks move toward tighter monetary settingsto fight inflation, index-linked exposure hasbeen positive, reinforcing the argument fordiversification not just across asset classes butalso within them.
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