From Insight Investment Management (Global) Limited
“For the first time in a while we have a small negative beta position. There are various indicators that suggest we remain in an environment that favours high quality defensive stocks and those that can withstand falling markets, in spite of the bounce back in UK and European equities after the volatility squall in mid-October. In 2010 and 2011 sudden bursts of volatility signalled more prolonged periods of risk-aversion. Cyclical stocks are underperforming, which suggests growth fears remain. Investment grade credit is outperforming high yield which hints that investors are putting a premium on quality and liquidity. When high yield starts to underperform it is often a canary in the coal mine for other risk assets.”
Disclaimer: The comment above does not constitute investment advice. Past performance is not a guide to future performance. The value of investments and any income from them will fluctuate and is not guaranteed (this may be partly due to exchange rate fluctuations). Investors may not get back the full amount invested.