Liontrust MA Quarter In Review Q3-2022 15.11.22 (Spreads) - Flipbook - Page 4
Our view of investment markets
• Stocks have priced in aggressive monetary tightening by central
banks and have become cheaper after the sell-offs this year. The
S&P 500 extended its decline in Q3 after having suffered its
worst first-half to the year since 1970. Yields of 4%-plus became
available on US treasuries and UK gilts.
• After the past decade that saw the US tech growth giants deliver
mesmerising outperformance, we expect to see many assets
reverting to performances that are more in line with longer-term
trends and fundamentals, including non-US equities regaining
performance.
• The recent market volatility has presented a ‘reset’ of pricing, most
notably in fixed income markets with government bond yields
moving up from their rock bottom levels.
• Active managers can prove their worth by identifying companies
that can adapt the most effectively in an environment of market
uncertainty and inflationary pressures.
• Yields available on both government and corporate debt are
significantly more rewarding than they have been in recent years.
• History shows that crises pass at some stage and the falls in
assets seen this year could present a good buying opportunity.
But investors should bear in mind that while there may be further
downside in markets, it would be easy to miss out on the upturn
when a sustained rally appears.
• Furthermore, following their sell offs, equity markets look attractively
valued from a forward-looking perspective.
• The future returns on equities and corporate bonds will depend,
however, on companies maintaining their robust earnings and
financial strength, which will be closely linked to the state of the
economy and so, while market pricing is becoming attractive the
pervasive sense of uncertainty keeps us ‘neutral’ in terms of overall
risk positioning.
The S&P 500 extended its decline in Q3
after having suffered its worst first-half to
the year since 1970
• The best counter to market volatility is to take a long-term view and
spread the risks across a broadly diversified investment portfolio
that can reap rewards from multiple sources and will avoid kneejerk responses to news and market events.
Yields available on both government
and corporate debt are significantly
more rewarding than they have been
in recent years
4 - Liontrust Multi-Asset Funds and Portfolios Quarterly Report: Q3 2022
Following their sell offs, equity
markets look attractively valued from a
forward-looking perspective
