James Giblin

We are not in the "AI is a bubble" camp. In fact, we remain positive AI equities through our Technology exposure as a diversified play on the theme. Within the AI sector, we are seeing a clear shift as investors become more discerning, increasingly looking to separate potential winners from companies unlikely to deliver sustainable returns. This growing scepticism is, in our view, a healthy market development. Although the sector's investment and revenue goals are ambitious, our analysis suggests they're plausible, despite ongoing challenges such as the need for more data centres, securing reliable power sources, and increased regulatory scrutiny. While these risks are genuine, so too are the sector's potential rewards. We maintain a positive view on the sector and would look to take advantage of any significant market pullbacks to increase our exposure. We remain neutral on government bonds but see relative value in gilts, where yields are elevated compared to peers despite expectations that UK inflation will converge towards that of other G7 countries next year, which we think makes gilts attractive.

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