Our views

Fixed income market reaction

Jonathan Platt, Head of Fixed Income

24 June 2016

We have not been making hasty, reactive decisions in our portfolios this morning. Our core positioning remains the same, and while valuations have been affected by this morning’s events, we believe this is more of a price reaction than a fundamental re-assessment of risk. Sectors which are more sensitive to the market, particularly financials, have been hardest hit.

We are long-term investors, and we are actively taking opportunities in the volatility that is rippling through markets today. Our focus in portfolios upon securities which offer stable cashflows provides a level of stability in periods of market turbulence such as we are currently witnessing.

Broader concerns that we will monitor include the knock-on effect in Europe and any response from the European Central Bank, and the contingent political fall-out both in the UK and abroad. We have minimal exposure to peripheral Europe, and this is restricted to select companies in which we have confidence. While the drop in sterling will be positive for exporting companies, we will watch closely the impact upon firms and industries dependent upon imports.

The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.