Liontrust MA Quarter In Review Q3-2022 15.11.22 (Spreads) - Flipbook - Page 6
Current positioning
•
In the short term, we expect the general level of
uncertainty to continue to manifest itself through
volatility. The obvious risk lies in tightening
monetary policy and slowing growth but there is a
sense that share prices have already corrected to
levels that factor in worsening prospects for 2022.
•
Despite having proved themselves to be better
at dealing with inflation than their developed
counterparts, emerging markets have been hard
by the rising dollar in Q3. Investors have also
shied away from higher risk assets this year. But
the long-term fundamentals remain intact.
•
Corrections this year have brought valuations of
US stocks back to less unattractive (if not yet
quite attractive) levels. The rotation towards
value has meant the correction in growth stocks
has been more pronounced.
•
In a reflationary world, we expect non-US stocks,
value and small cap stocks to outperform.
•
We have been under-weight fixed income for
some time but we are starting to reduce this as
yields move out.
•
There are certainly benefits to diversifying
towards non-UK government bonds, with several
other central banks further ahead of the curve
than the Bank of England in raising interest rates.
Some current yield levels offer the prospect of
inflation-beating yields further down the line.
•
UK equities still look relatively cheap despite
outperforming many other developed markets
around the world this year. It remains a contrarian
play though with still a lot of uncertainty around
its future.
6 - Liontrust Multi-Asset Funds and Portfolios Quarterly Report: Q3 2022
