Time to batten down the hatches?
David Smith, Portfolio Manager of Henderson High Income Trust, talks about the factors currently impacting the UK market, including inflation and interest rates amid a cost-of-living crisis. David also touches on the recent turmoil within bond markets and the need for prudent diversification in volatile market environment.
PODCAST:
24 minute listen
Key takeaways:
- Though the UK stock market has been quite resilient compared to global peers, its performance has largely been driven by the top 20 largest stocks. Meanwhile, the more cyclical smaller-and-medium sized businesses have struggled.
- We have been lowering our gearing and increasing our bond exposure for a more defensive positioning. The equity portfolio also has a bias towards defensive and more resilient businesses that can navigate a downturn.
- Valuations in the UK market remain attractive, especially when you look at the P/E ratios relative to other developed markets. While political uncertainty still remains, this valuation gap provides an attractive entry point for investors with long term horizons.
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These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. Any securities, funds, sectors and indices mentioned within this article do not constitute or form part of any offer or solicitation to buy or sell them.
Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.
The information in this article does not qualify as an investment recommendation.
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24 minute listen
- Though the UK stock market has been quite resilient compared to global peers, its performance has largely been driven by the top 20 largest stocks. Meanwhile, the more cyclical smaller-and-medium sized businesses have struggled.
- We have been lowering our gearing and increasing our bond exposure for a more defensive positioning. The equity portfolio also has a bias towards defensive and more resilient businesses that can navigate a downturn.
- Valuations in the UK market remain attractive, especially when you look at the P/E ratios relative to other developed markets. While political uncertainty still remains, this valuation gap provides an attractive entry point for investors with long term horizons.