Repositioning Portfolios

Global equities have not only recovered substantially from their lows last month but have now retraced half of their losses from the autumn of 2018.  The big question is, of course, where will they head now?  Our expectation is that they may move higher over the course of the year but, if they do, it won’t be by much and almost certainly not in a straight line as plenty of risks remain.

We are using these stronger markets to reposition our portfolios.  Whilst we firmly believe that small and medium sized companies offer excellent opportunities when times are good, we recognise that they can suffer more than larger companies when times are bad.  Accordingly, we are looking to progressively move our positioning into larger companies as part of our ongoing programme of de-risking.

Whilst we are underweight in UK equities, for our domestic clients this is still a significant part of their equity exposure.  As a result, it is this area we are looking at first and, over the coming week, expect to move out of many of our smaller and mid cap positions.  The proceeds will be allocated to larger, high quality companies – a theme that we also expect to replicate in our European and US exposures in the coming months.

The tedious saga of leaving the European Union rumbles on and on.  One would be hard put to describe the stench emanating from the sorry saga as fragrant.  With Plan B – whatever form that may take – due imminently we will see in what direction things lurch next.  But we won’t be holding our breath for a miraculous consensus and resolution any time soon.

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