Calm before the storm?
Toby Cross, Portfolio Management Specialist, talks to Arne Hassel, Chief Investment Officer, about how markets and portfolios have performed during October.
While most asset classes have recorded decent gains year-to-date, October was a relatively quiet month. However, Arne notes that it was foreign exchange which saw the most volatility over the month with sterling continuing to slide, which helped sterling-based portfolios in particular.
Arne considers valuation and economic fundamentals to be the two themes which have been driving economic growth over the year. Those asset classes that were most undervalued at the beginning of the year, namely Emerging Markets Equities and oil, are the ones that have performed the best. In terms of economic fundamentals, growth has been half decent over the year with inflation picking up, while central banks have continued to be accommodative.
While political analysis may be interesting and provides short-term opportunities, it can be something of a distraction to the wider economy and markets. Instead, while economic fundamentals remain sound, Arne believes investors should be rewarded by remaining overweight risk assets, such as equities and high yield, and underweight developed government bonds and investment grade.
Download the graphs referred to [PDF, 52KB]
This video is intended for existing Discretionary Portfolio Management clients of Barclays. This video does not constitute a recommendation or advice of any kind.