Lloyds Private Bank trims US bonds in favour of UK and Japan

Added 8th November 2016

Lloyds Private Bank has reduced its exposure to United States bonds in favour of raising its United Kingdom and Japanese bonds allocations.

Lloyds Private Bank trims US bonds in favour of UK and Japan

Chief investment officer Markus Stadlmann, explained that the latest asset allocation changes at the bank stem from a belief UK and Japanese bonds will continue to benefit from loose monetary policy as US bonds start to be impacted by Federal Reserve rate rises.

Stadlmann noted that while the main focus for investors in the short term will be the US election today, attention will soon likely shift back to interest rate decisions by central banks, with investors and economists expecting the Fed will raise borrowing costs at its December meeting.

On the equites side of the asset allocation, Lloyds is holding things steady with Japan the favoured market at the moment.

“We are maintaining our smaller allocation to UK equities because of continuing uncertainty and anticipated market volatility,” he said. “We retain moderate holdings in the US and Europe and are keeping our overweight position in Japanese equities where we feel prospects are more positive.”

Lloyds remains unconvinced about the prospects for a recovery in oil and other commodities however.  “Although the price of commodities has recovered slightly, we still do not foresee sufficient gains to merit investing in this asset class at the moment,” he said.

“Our overall outlook for the remaining months of the year is one of caution amid tepid global economic growth, political uncertainty and a lack of clarity around the UK’s departure from the EU,” Stadlmann said. “Until there are signs that the economy is on a sure footing and corporate profits are growing sustainably, we will retain our lower allocation to assets such as equities and commercial property and our increased allocation to bonds.”

Sponsors

Portfolio Adviser: Guide to Europe

Portfolio Adviser: Guide to Europe

After a politically turbulent time in 2016, Europe has been under scrutiny with several nations going to the polls.The question asked, would investors be right to...

Kames Income Hub

home_research_centre

Vincent McEntegart, manager of the Kames Diversified Monthly Income Fund, explains how he aims to deliver a stable and sustainable income of 5% p.a.*, paid monthly, by investing in a range of asset classes

Square Mile Research

Premier Multi Asset Global Growth - Alex Farlow
Premier Multi Asset Global...

Talking Factsheets is a video service for users...

Visitor's Comments Add your comment

Add Your Comment

We won't publish your address

About Author

Alex Sebastian

News editor

Alex joined Portfolio Adviser in April 2014 and has been a financial journalist since 2008. He has previously held editorial positions at the Financial Times Group and Euromoney Institutional Investor. Alex is NCTJ qualified and has a degree in economics from the University of Sussex.

Profiles

Viewpoint

Investment Strategy

Feature

Tweets

Events

PA Edinburgh 2017
PA Edinburgh 2017

Thursday 7 September
Balmoral Hotel, Edinburgh

PA Alternatives 2017
PA Alternatives 2017

Tuesday 12 September
Radisson Blu Edwardian Bloomsbury Street Hotel

PA Dublin October 2017
PA Dublin October 2017

Tuesday 10 October
Westbury Hotel, Dublin

PA US 2017
PA US 2017

Tuesday 17 October
Furniture Makers' Hall

Sponsored Content

OTHER STORIES FROM LAST WORD...