Asset Allocation

As the valuation gap between the US and the rest of the world narrows, we see value opportunities outside the US.

Europe, for instance, has not seen as robust growth as the US, giving European companies an easier hurdle to clear in 2019. Meanwhile, the Japanese market, which has seen decent earnings growth, could benefit from signs of a more durable pickup in inflation.

Additionally, we expect companies with low debt and strong cash generation to do well as economic and earnings growth moderates.

In the UK, Brexit presents a risk that’s hard to analyse, but also an opportunity to focus on UK-domiciled mulitnationals that source most of their revenue outside of the UK / EU. These stocks are defensive in nature and less likely to be impacted by an economic slowdown.


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