Hugo Thompson

In our view there are going to be three key themes driving markets over the next six to twelve months. As outlined below, we are positioning to capture these themes:

• The economy is holding steady: companies remain profitable, governments spending is supportive, and interest rates are likely to fall. However, there are some signs of softening on the horizon. We retain an elevated stock market exposure, but hold gold and US dollar for ballast

• Earnings take the helm: we expect a market driven less by headlines and speculation, more by fundamentals in the year ahead. We are tilting towards US and Emerging Market equities where profits remain high, and remain cautious on the UK where earnings are softer

• Mind the debt iceberg: public finances in developed markets continue to take on water as national debt and interest payments rise. We remain focused on shorter dated developed market government bonds.  By contrast, we like emerging market government bonds and corporate bonds, where spending is more contained

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