Liontrust MA Quarter In Review Q3-2022 15.11.22 (Spreads) - Flipbook - Page 5
Tactical Asset Allocation
• This table shows how confident we are about markets and asset
classes, with five the most and one the least. In our most recent
quarterly tactical review, we kept our overall score at three, having
reduced it from four in the previous quarter. Navigating higher
inflation and slowing growth requires a more defensive positioning.
• Our ratings for equities fell from four to three to reflect the greater
uncertainties around interest rate policies and economic growth.
We have moved the risk score down for both European equities
and European small caps from three to two, given that Europe is
1
2
the region most at risk from a protracted conflict in Ukraine and
the resulting energy crisis.
• In terms of fixed income, we have reduced our rating for indexlinked bonds from three to two – it is best to buy inflation
protection when the risk is underappreciated, unlike now. We
have, however, raised our rating on global government bonds
from two to three because there are benefits now in diversifying
beyond the UK and yields have risen to more attractive levels.
3
4
5
Direction of travel
•
Overall
Cash
•
UK gilts
•
•
Global government bonds
Investment grade corporate bonds
•
Index-linked bonds
•
High yield
•
Emerging market debt
•
Convertibles
•
Equity overall
•
US equity
•
US small caps
•
UK equity
•
UK small caps
•
European equity
•
European small caps
•
Japanese equity
•
Japanese small caps
•
•
Emerging markets equity
•
Asian equity
Property
•
Commodities
•
Hedge funds
•
Absolute return
•
Source: Liontrust, 22 September 2022. Not all the asset classes are used in all the MA portfolios and funds
Liontrust Multi-Asset Funds and Portfolios Quarterly Report: Q3 2022 - 5
