Outlooks

We expect a modest rather than meaningful slowdown in global economic growth in the months ahead, with easing inflation leading to gradual interest rate cuts in developed economies. After a period where US tech giants have dominated, we expect market returns to be spread across a broader range of companies and for equity markets elsewhere in the world to begin to narrow the gap with the US.

We believe bonds look attractive because demand from investors is likely to increase as rates on cash deposits fall. In particular, we favour government bonds. We have made a measured increase to our exposure to UK equities, on the basis of attractive valuations and a more supportive macroeconomic backdrop. We also expect infrastructure to benefit from lower rates and have added an allocation to portfolios.

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