Please see the below article from Brewin Dolphin providing an update on rebalance and market news. Received yesterday evening – 13/12/2022
Backdrop to this month’s tactical rebalance:
US inflation appears to have peaked and central banks are getting closer to the end of their tightening cycle. This should relieve pressure on growth stocks and make sovereign bonds a more attractive asset class. In China, the government seems to be moving away from its economically damaging zero-Covid policy following protests across several major cities.
This month, the Asset Allocation Committee felt that although progress is being made in the fight against inflation, it is still not the right time to increase government bonds further.
There were no changes in the Asset Allocation Committee’s guidance. However, in light of forthcoming changes to the strategic benchmarks in the new year (where overseas equities are being increased and UK equities are being reduced), adjustments have been made to the portfolios’ regional equity exposure.
The key details of this rebalance are as follows:
The changes reflect a reduction in the UK equity allocation and an increase in the overseas equity allocation.
•In Active MPS, there has been a reduction in the MI Select Managers UK Equity and UK Equity Income funds. Existing overseas equity holdings have been increased.
•In Passive Plus, there was a reduction in broad UK equity and FTSE 250 exposure. Existing overseas equity holdings have been increased.
•In Sustainable MPS, US equity exposure was increased through the Brown Advisory US Sustainable Growth fund. UK exposure was moderated through a reduction in TB Evenlode Income and Royal London Sustainable Leaders.
The next planned rebalance date is 16 January 2023.
Markets in a Minute
US and European stock markets fell last week as several bank CEOs gave a bleak outlook for the global economy.
In Asia, the Shanghai Composite gained 1.6% and the Hang Seng soared 6.6% as China announced a ten-point guideline to its new Covid prevention and control measures. We discuss these topics, and more, in the latest Markets in a Minute.
In this week’s video, Guy Foster, Chief Strategist, discusses the outlook for the US economy in 2023 and whether a recession could be avoided. Janet Mui, Head of Market Analysis, explores China’s pivot from its zero-Covid strategy and the complexities involved in the reopening process.
Please continue to check our Blog content for advice, planning issues and the latest investment, market and economic updates from leading investment houses
Alex Clare
14th December 2022