- The valuation gap between Europe and the US has tightened since Draghi’s “whatever it takes speech”.
- The European overweight has been reduced to inline.
- We have upgraded Japan. We rate the authorities’ chances of restoring exchange rate competitiveness and creating an inflationary environment.
- Following another strong month for bonds we have reduced gilts as we believe the recent dovish signals from the Bank of England are unwarranted and may, therefore, be short lived.
- We add to Alternatives; including esoteric assets such as private equity and infrastructure which, in their own ways, stand ready to benefit from the prolonged easy money environment.
Head of Portfolio Strategy