EN - Report (page 2) - Flipbook - Page 6
Current positioning
•
We see better value in Europe, where stocks
are trading at attractive valuations versus the US
due to strong earnings revisions, and the region
is also poised to benefit from a value/cyclicaldriven market.
•
The UK remains cheap and, more than a year
on from the long-awaited Brexit deal getting
done, is still a contrarian play despite strong
recovery from the depths of the pandemic.
•
Emerging markets remain a watchpoint as
the regulatory shift in China has caused a rerating in the region’s stocks, especially in the
technology sector. This has made emerging
market companies more attractive on valuation
but they bring added near-term volatility.
•
We continue to be bullish on the reflation trade
that looks to be gathering pace again after a
summer 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 value
should outstrip growth.
•
We appreciate the direction of bond yields will
be upward over time as interest rates rise but, as
ever, the path will not be linear and we maintain
exposure to this asset class for its diversification
to equities, some level of inflation protection and
increasing income.
•
Amid a weaker few months for bonds as central
banks move toward tighter monetary settings
to fight inflation, index-linked exposure has
been positive, reinforcing the argument for
diversification not just across asset classes but
also within them.
