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Central bank stimulus supports equities

9 months ago

The European Central Bank stepped in to support the economy through lower interest rates and further bond purchases, while the US Federal Reserve also cut rates. This support then dampened the spirits of bond investors, and global bond markets ended the month a little weaker. Returns for UK investors were worsened by a stronger pound, which led the value of non-UK bonds to decline in sterling terms.

In contrast, shares (‘equities’) were fairly strong, responding positively to the central bank stimulus. In our view, the weakening economic picture and the abundance of risks, including the US-China trade war, Brexit  and geopolitics (such as the drone strike on Saudi oil facilities), lead us to maintain our underweight exposure to equities.

Read more about how Sheldon MacDonald, Deputy Chief Investment Officer, positioned the Architas Multi-Asset Blended Fund range and Architas Multi-Asset Passive Fund range last month in shareable, client-friendly PDFs.

Sheldon MacDonald, CFA

Deputy Chief Investment Officer

Sheldon co-manages the Architas Multi-Asset Active, Passive and Blended fund ranges, as well as the Architas Global Equity Income fund. He oversees fund selection and manages the products’ asset allocation and investment strategies. He also leads fund manager research on global equity strategies.

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