Andrew Johnston

We are neutral on equities. Whilst a global recession over the next 12 months remains possible, we believe the chances of a severe economic slowdown have materially reduced. Within equities, we have reduced exposure to the US after such a strong run of returns. We have increased exposure to the better valued UK and emerging market regions. We also hold a lower risk (minimum volatility) equity strategy, in case recession risks unexpectedly increase. Given the rise in bond yields, we believe the case for bonds is more attractive now than it has for years. Our preference remains for high quality bonds, a reduced sensitivity to interest rates and increased exposure to inflation linked bonds, given the uncertain path ahead for inflation.