Manpreet Gill

Our biggest allocation change was to move to a neutral stance across fixed income. This may appear to be an exceptionally boring stance but for us it focused attention on the fact that, in a world of very tight credit spreads, taking a view on carry and the direction of rates is becoming increasingly central to fixed income returns. We believe investors are still paid well to lock in an income on yield rebounds as cash yields continue to fall. However, it does not pay well to take on additional credit risk. This is the view our allocation stance tries to take.

Our biggest convictions are to overweight gold and underweight cash. We are of the view that gold is well-supported by strong central bank demand, a shift in demand patterns from 2022 onwards. This has meant the traditional driver of prices – bond yields – has less of an influence as long-term buyers dominate flows.

Cash, on the other hand, is coming off an unusually long period of good performance relative to other major asset classes when placed in a long historical context. We believe continued Federal Reserve rate cuts are making cash less appealing at a time when risky asset classes such as equities and alternatives like gold are already outperforming dramatically while bonds allow one to lock in a similar yield but for a much longer period of time.

Factfulness by Hans Rosling - a reminder of the importance of relying on credible data and facts to make decisions