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Repositioning continues

Date: 28/01/2019
Category:

The bounce back in global equity markets seems to have paused.  But this comes after an 11% recovery from the lows before Christmas which translated into 7% in sterling terms.  It hasn’t been the recovery many expected with some of the riskier companies doing the best.  The ghastly ‘risk on’ phrase gets so over used but it does seem apt in the circumstances.

One of the areas that have done well is the smaller companies.  We have had something of a bias towards smaller and medium sized companies in the UK for some time.  Over the long term, they tend to be stronger performers.  But they are not really the place to be when a recession arrives.  Now we are still not expecting a recession to arrive in the immediate future, however, we would be naïve not to take steps to protect our clients should one occur in the coming year.  Accordingly, we have taken the opportunity to sell into the rebound and are switching some of our small and medium sized company exposure into larger, more defensive companies.

This move is part of our ongoing programme of de-risking and we expect to be making further changes like this over the coming months.  We find the combination of blasé investors and pessimistic commentators unsettling.  Although the underlying newsflow is not that bad, the risk of a self fulfilling prophecy causing markets to sell off sharply again remains.  So we are vigilant and cautious.  The end may not be nigh, but this is no time for speculation.

Regulatory notice

This message may contain information that is confidential or privileged.  If you are not the intended recipient, please advise the sender immediately and delete this message.  KW and KW Wealth are trading names of KW Investment Management Limited (registered number 06931664), which is authorised and regulated by the Financial Conduct Authority and, in South Africa, by the Financial Sector Conduct Authority.  It has its registered office at 13 Austin Friars, London EC2N 2HE and is a  wholly owned subsidiary of Kingswood Holdings Limited (registered number 42316) which is incorporated in Guernsey with registered office at Regency Court, Glategny Esplanade, St Peter Port, Guernsey, GY1 1W

Risk warnings

This message is not to be construed as a solicitation or offer to buy or sell securities and does not in any way constitute investment advice, nor should it be used as the basis for any investment decision.  The information contained in this message has been prepared using all reasonable care. However, it is not guaranteed as to its accuracy, and it is published solely for information purposes.  Our opinions are subject to change without notice and we are not under any obligation to update or keep this information current.  The investments discussed in this message may not be suitable for all investors.  KW Wealth does not guarantee the performance of any investments.  Past performance is not necessarily a guide to future performance.  The value of investments may go up or down and you may not get back the amount you have invested. The income from an investment is not fixed and may fluctuate. The value of an investment involving exposure to foreign currencies can be affected by exchange rate movements which may cause the value of the investment to go up or down.  KW Wealth and/or its affiliated companies and/or their employees may, from time to time, hold shares or holdings in the securities discussed in this message and may as agent buy or sell those securities.

Restricted investors

This document is not, and under no circumstances is to be construed as, an advertisement, or any other step in furtherance of a public offering of shares in the United States or Canada.  This document is not aimed at persons who are resident in the United States, Canada or any province or territory thereof, nor any other jurisdiction where such distribution would be contrary to applicable law or regulation.

The value of investments and any income from them can fall and you may get back less than you invested. KW, KW Wealth, KW Protect, KW Wellbeing, KW Institutional, KW Partner and KW Private Office are trading names of KW Wealth Planning Limited (registered number 01265376), KW Investment Management Limited (registered number 06931664 ) and KW Trading Services Limited (registered number 03109469) which is a member of the London Stock Exchange. Each of these companies is authorised and regulated by the Financial Conduct Authority and has its registered office at 13 Austin Friars London EC2N 2HE. KW investment Management Limited is also regulated in South Africa by Financial Sector Conduct Authority. All these companies are wholly owned subsidiaries of Kingswood Holdings Limited (registered number 42316) which is incorporated in Guernsey with registered office at Regency Court, Glategny Esplanade, St Peter Port, Guernsey, GY1 1WW.