Julian Menges

Plans announced by US President Trump should stimulate growth, but at the risk of inflation and slowdown elsewhere in the world. Many countries are now forging alliances to become less reliant on the US, but this takes time. Base rates will not be cut as quickly and sharply as hoped, and higher bond yields are possible longer term driven by US tariffs, soaring debt levels and rising interest payments.

We have been underweight US equities and Technology based on their high valuations – the recent sharp underperformance in these markets has led us to outperform, but we are looking at any further weakness to increase exposure. We remain underweight Bonds given their uncertain outlook, illustrating another area where we have been adding relative performance.

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