Standard Life Investments has raised its exposure to UK and US equities but remains cautious in the ...
Standard Life Investments has raised its exposure to UK and US equities but remains cautious in the current equity environment.
The interest rate backdrop suggests investors could look through the slowdown to the next period of economic expansion, according to the group. Despite this it is reluctant to move excessively overweight as it remains unconvinced that investors will turn positive in the short term.
Ken Forman, head of strategy for Standard Life, said: "The outlook is not yet clear enough to justify a major change in our weightings."
Standard Life believes the UK equities market is likely to recover once investors start anticipating a fall in interest rates.
Forman said: "Positives for UK equities are upcoming index changes that will raise market representation in global indices and create attractive valuations." Market predictions indicate low earnings growth next year and there is concern that a weaker sterling could deter foreign investors, Forman said.
Standard Life also believes the US equity market is less vulnerable than others to a slowdown, as monetary policy could be rapidly adjusted if the economy weakens sharply.
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