Our asset allocation
In 2024, investors need to balance the risks of early signs of economic expansion against the delayed impacts of monetary policy.
Our asset allocation
In 2024, investors need to balance the risks of early signs of economic expansion against the delayed impacts of monetary policy.
Our asset allocation
In 2024, investors need to balance the risks of early signs of economic expansion against the delayed impacts of monetary policy.
The value of investments can fall as well as rise, and you may not get back the full amount you invest. Past performance should not be taken as a guide to future performance. Eligibility criteria, fees and charges apply. You should continue to hold cash for your short-term needs. Your capital is at risk.
Our portfolio positioning
Against this backdrop, our portfolios are positioned to lean into the positive outcomes seen in the business cycle while earning the bond yields of a higher interest rate environment.
As such, our investments are weighted towards risky assets, more specifically global equities. For this exposure, we have chosen an active manager with a good track record of picking high quality, multi-national companies that can best manoeuvre the current environment.
Attractive bond yields
We’re also earning 4% to 6% yields from the global government and corporate bond markets, where contractual income is attractive. Additionally, we have an allocation to global high yield as prevailing high single-digit yield levels have led to attractive long-term returns.
GOLD
We have an allocation to gold given various uncertainties associated with the lagged impact of higher interest rates, record government budget deficits and geopolitical tensions. In stressed market events, gold tends to be protective, and we blend it with our bond allocation for diversification.
OUR HOUSE VIEW
2024 opportunities
EUROPEAN BONDS
Europe is much closer to a recession than the US, which should support European bonds as yields are more likely to fall.
Active management
Peak interest rates and the prospect of them staying higher for longer will see dispersion in stock outcomes. We lean towards active managers with expertise of picking companies that can best manoeuvre this environment.
SMALL CAPS
Smaller companies were on our watch list last year, but we didn’t include them in our client portfolios and funds as rising interest rates created headwind challenges. But with those interest rate hikes ending, the outlook has improved for such firms. And smaller company valuations are at historically cheap levels, creating the chance to get good deals.
EUROPEAN BONDS
Europe is much closer to a recession than the US, which should support European bonds as yields are more likely to fall.
Active management
Peak interest rates and the prospect of them staying higher for longer will see dispersion in stock outcomes. We lean towards active managers with expertise of picking companies that can best manoeuvre this environment.
SMALL CAPS
Smaller companies were on our watch list last year, but we didn’t include them in our client portfolios and funds as rising interest rates created headwind challenges. But with those interest rate hikes ending, the outlook has improved for such firms. And smaller company valuations are at historically cheap levels, creating the chance to get good deals.
Explore the Report
When you become a client of Coutts, you'll be part of a network of exceptional people
