We believe that bond yields have finally bottomed. As they begin to increase gradually, investors can expect a higher ‘risk-free’ return from longer term government bonds. This, in turn, should see a jump in the required returns from other riskier asset classes such as equities, placing pressure on current valuations.... Show More
In getting a handle on potential medium-term returns from an asset class, the key is its starting point valuation. For example, if current yields – say bond yields and dividend yields – are lower than “normal,” this will likely constrain returns relative to the past. Our approach to assessing medium-term... Show More
We see value in cash and have been building cash across our portfolios. The rationale is that we think it’s a sensible place to be invested, not for the long term, but as a store of value as issues in other assets resolve themselves. The chart below highlights our three-year... Show More
