DPMS Portfolio Commentary
As we are expecting the remainder of 2022 to remain volatile with further interest rate hikes and the effects of a recession, the Vizion Wealth Investment Committee have agreed to remain maintain a more defensive style to portfolios, further reduce exposure to Small-Cap Equities, balance our Chinese & Indian Equity exposure and start to increase positioning towards traditional fixed interest given the recent sell off of bond capital values.
By removing UK Small-Cap Equity this will reduce exposure to potential downside volatility in the portfolio in the short-term due to the threat a deeper recession poses on smaller UK companies. We see the outlook for the European region more positive so have reduced exposure to European Small-Cap Equity, rather than removing it.
We are continuing to keep a close eye on China given recent political updates, remaining relatively neutral at present but aware that changes could happen quickly in the event of COVID restrictions being eased. We have slightly increased our Indian Equity exposure to balance this allocation against Chinese Equity.
Fixed interest has seen quite the struggle throughout 2022 as expectations of interest rate increase continue but we find that valuations and yields across North America and the UK are now sufficiently attractive to move back towards traditional bonds in both regions. This increase in exposure comes from the reallocation of UK Small-Cap Equity, the removal of an Absolute Return fund with a less favourable outlook and the deployment of some of the additional money market holdings we have retained. We are retaining a moderate level of cash in the lower risk portfolios to provide an additional level of downside protection.
All in all, the changes to the portfolios for Q4 focus on balance with a continued focus on Capital Preservation due to the retained Value and Defensive characteristics. This being said, the portfolios are also well positioned to benefit over the long-term with exposure to a variety of areas, such as growth-oriented equity and newly bolstered traditional fixed interest, which are currently trading below their long-term averages. Although Defensive in nature, the portfolios remain well positioned to benefit from an eventual market recovery and to achieve growth over the longer-term.
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The information contained in this article is intended solely for information purposes only and does not constitute advice. While every attempt has been made to ensure that the information contained on this article has been obtained from reliable sources, Vizion Wealth is not responsible for any errors or omissions. In no event will Vizion Wealth be liable to the reader or anyone else for any decision made or action taken in reliance on the information provided in this article.
DPMS Portfolio Commentary November
As we are expecting the remainder of 2022 to remain volatile with further interest rate hikes and the effects of a recession, the Vizion Wealth Investment Committee have agreed to remain maintain a more defensive style to portfolios, further reduce exposure to Small-Cap Equities, balance our Chinese & Indian Equity exposure and start to increase positioning towards traditional fixed interest given the recent sell off of bond capital values.