Financial professionals disclaimer

The information on this page is intended only for the use of independent financial advisers (IFAs) and other professional financial intermediaries. Please read the following information before proceeding. Reliance should not be placed on the information within this website and the views expressed when taking investment decisions. Please also confirm that you are an IFA or other professional financial intermediary, that you have read the information and wish to proceed further by clicking on the ‘Accept’ icon. If you are a retail investor, please click on the ‘Decline’ icon and visit the FP Brompton funds and WAY Global funds pages of our website. If you do not wish to proceed further, please also click on the ‘Decline’ icon.

Views and opinions

Brompton has expressed views and opinions on this website and these may change.

Accuracy

Brompton has taken reasonable care and employed reasonable skill to ensure that the information contained in this website is accurate at the time when this information is supplied by Brompton via its internet service. Errors and omissions may, however, occur because of a number of factors inherent in web-based information delivery and are not within Brompton’s reasonable control. For example, errors or omissions may occur because of unauthorised access to this website or the impact of hardware, software or operator error or a data transmission malfunction. Brompton, therefore, advises website visitors to confirm the accuracy of any information with Brompton before seeking to rely on such information.

Please read the following important information before proceeding. This includes information on some of the laws and regulations applicable to this website.

The information on this site is issued and approved by Brompton Asset Management LLP (Brompton) of 1 Knightsbridge Green, London, SW1X 7QA. Brompton is authorised and regulated by the Financial Conduct Authority.

This website is for information purposes only and prospective clients should refer to Brompton’s printed literature. Any prices and other information on this website do not constitute personal recommendations or advice.

The material on this site is directed only at persons in the UK. It is not intended for distribution to, or use by, any person in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. It is your responsibility to inform yourself of and to observe all applicable laws and regulations of the relevant jurisdictions. Specifically, this website should not be accessed by any US Person. Please see a definition of a US Person at the end of this document.

Brompton may record telephone calls to protect the interests of clients and itself and to improve customer service.

Investments

You should always bear the following in mind:
Past performance is not a guide to future performance.

The value of investments and any income from them may go down as well as up and you may not get back all of your original investment. Changes in exchange rates may cause the value of investments and the income from them to go down or up.

If you are unsure about the meaning of any information provided on this website, please consult your financial or other professional adviser. Brompton Asset Management does not offer investment advice.

No reliance

Brompton has taken all reasonable care that the information contained within the website is accurate at the time of the publication. Brompton, however, makes no representation or warranty, including liability towards third parties, expressed or implied, as to its accuracy, reliability or completeness. Information, opinions and estimates and any other contents on this website are provided by Brompton for information purposes only and are subject to change without notice.

Nothing contained on the website constitutes investment, legal, tax or other advice nor is to be relied on in making an investment or other decision. You should obtain relevant and specific professional advice before making any investment decision.

No warranty

Brompton assumes no responsibility for, and makes no warranties that, functions contained on the website will be uninterrupted or error-free, that defects will be corrected, or that the website or the servers that make it available will be free of viruses or other harmful components.

Liability waiver

Under no circumstances, including, but not limited to, negligence, shall Brompton be liable for any special or consequential damages that result from the access or use of, or the inability to access or use, the materials at the website.

You should be aware that the internet is not a completely reliable transmission medium. Brompton shall not have any liability for any data transmission errors such as data loss or damage or alteration of any kind, including, but not limited to, any direct, indirect or consequential damage, arising out of the use of the services provided herein.

Messages that you send to Brompton by e-mail may not be secure. You are recommended not to send any confidential information to Brompton by e-mail. If you choose to send any confidential information to Brompton via e-mail you do so at your own risk with the knowledge that a third party may intercept this information. Instructions sent by you via e-mail and to the website are processed exclusively at your risk.

This website may contain links to other sites. Brompton is not responsible for the content or privacy practices of those other sites.

This website is governed by the laws of England.

Use of your personal data

We will use the personal data that you provide us on the website to process information requests that you make. In order to use your personal data as set out here, these may be stored and processed in any country worldwide and will be disclosed to partnerships and companies in the Brompton group and their agents.

Further information

This information will be updated from time to time. You are advised to check if any such updates have been made since you last visited this website.

US Persons

A US Person is any natural person resident in the United States (US); or a company or partnership incorporated or organised in the US, but excluding an offshore branch or agency of a US person that operates for valid business reasons and is engaged and regulated as an insurance company or bank; or a branch or agency of a foreign entity located in the US; or a trust of which the trustee is a US person, unless a non-US person has or shares investment discretion; or an estate of which a US person is the executor or administrator, unless the estate is governed by foreign law and a non-US person has or shares investment discretion; or a non-discretionary account held for the benefit of a US person; or a discretionary account held by a US dealer or fiduciary, unless held for the benefit of a non-US person; or any entity organised or incorporated for the purposes of evading US securities laws.

Market outlook
MARKET OUTLOOK

Brompton invests globally in all major asset classes. In making asset allocation decisions, first, we use information conveyed by numerous data releases to build a picture of the global economic outlook. Secondly, we combine the message from the data with our knowledge and investment experience to determine which investments are likely to perform in the prevailing economic conditions. Thirdly, we analyse valuations to identify genuine opportunities. Please use the dropdown menu to view our current thoughts about each major asset class and geographical region.

Overview
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  • Sovereign bond yields have risen from historic lows
  • Federal Reserve raised rates in March 2017 for the third time since 2015 and struck a hawkish note, with majority in favour of shrinking Fed balance sheet later this year
  • Other major central banks still expanding monetary support and US government seeking to increase fiscal stimulus
  • Political risk has subsided somewhat as centrist candidates were successful in eurozone elections
Equities
true
  • Equities expected to perform well as inflation rises from subdued levels
  • Policies of monetary and fiscal easing are supportive
  • Change in market leadership since mid-2016 as cyclical companies outperform expensive “quality” companies
  • Valuations supportive for equities in Europe ex-UK, Japan and some emerging markets. US equities on high valuations reflect anticipated fiscal easing
Bonds
true
  • US inflation reaches 2% central bank target because of near-full employment and commodity price rises in 2016
  • Federal Reserve may tighten monetary policy more rapidly than anticipated leading to losses for longer-dated bonds
  • UK inflation may rise swiftly as sterling weakness compounds inflationary pressure from commodity prices and wages
  • Local currency emerging market bonds may continue to benefit from currency appreciation and interest rate cuts
US
true
  • Failure to repeal Obamacare at first attempt casts doubt on government’s ability to deliver large-scale fiscal easing
  • US financials to benefit from improving profitability as interest rates rise
  • Consumer confidence high thanks to cheap fuel and higher employment.
  • Manufacturing leading indicators rise as impact of stronger dollar subsides
  • US earnings growth rate forecast to accelerate in 2017
UK
true
  • Bank of England maintains highly accommodative monetary policy despite stronger-than-anticipated growth and inflation since Brexit referendum
  • UK consumer spending resilient but savings ratio falls as real incomes are squeezed by imported inflation
  • Sterling rises following UK election announcement on hopes an increased majority might strengthen the UK’s hand in Brexit talks
  • UK manufacturing benefits from lower sterling post-Brexit vote although a relatively small sector of the economy
Europe ex-UK
true
  • European Central Bank committed to quantitative easing and ultra-low interest rates until at least 2018
  • Leading indicators signal improving eurozone economy
  • Eurozone unemployment falls below 10% but significant regional imbalances persist
  • Political risk subsides somewhat as election results in Holland and France maintain the status quo
Japan
true
  • Bank of Japan policy of near-zero 10-year government bond yields intended to weaken currency and stimulate inflation
  • Japanese equities on low valuations relative to other global equity markets
  • Yen a safe-haven asset at times of market stress
  • Lack of clarity on US border taxes impacts Japanese exporters
China
true
  • Renminbi regains competitiveness relative to dollar since shock currency depreciations in 2015 and 2016
  • People’s Bank cuts interest rates and reduces bank reserve requirement ratio to support economy
  • Impact of high debt levels on public and corporate sectors unquantifiable
  • Chinese policy focused on establishing renminbi as global reserve currency
Asia Pacific ex-Japan and emerging markets
true
  • Fears of US protectionism recedes
  • 2016 recovery in commodity prices benefits exporters
  • Regional equity markets generally supported by valuations
  • Indian equities buoyed by cheap energy and political reforms including demonetisation of large-denomination bank notes and introduction of a general sales tax
Hedge funds
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  • Disappointing performance
  • Fund selection paramount
  • Limited investments on behalf of clients in asset class
  • Lower-volatility funds with consistent returns may diversify portfolio risk
  • Undertakings for Collective Investment in Transferable Securities (UCITS) regulation a Brompton requirement
Gold
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  • Gold falls in response to Trump’s inflationary policy agenda and US interest rate rises
  • Gold miners highly-sensitive to gold price movements
  • Chinese central bank purchases lower-than-expected
  • Gold retains safe-haven attractions at times of heightened volatility
Commodities
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  • Supply-side shock in 2014 resulted in major oil price fall as producers competed for market share
  • US output reduction in 2016 led to oil price recovery but US production rises in 2017
  • Opec production accord reduces risk of renewed oil price weakness
  • Commodity prices remain sensitive to Chinese demand
Property
true
  • Financial Conduct Authority invites comments on “illiquid assets and open-ended investment funds” discussion paper in response to post-Brexit referendum suspension of some open-ended property funds
  • Brexit may lead to falling demand for City of London offices
  • Recovery in UK inflation may result in rising bond yields and falling demand for longer-duration assets such as commercial property
  • Sterling’s fall increases attraction of UK properties to non-sterling buyers and may stimulate rental demand in longer term

This market outlook is based on the opinions of Brompton’s asset management team at the time of writing, supported by publicly-available information and other sources that Brompton believes to be reliable. Brompton cannot guarantee the accuracy of the information expressed. The views and opinions expressed are subject to change. They do not constitute investment advice and should not be relied upon as such. Nor should they be considered a solicitation or recommendation to buy or sell a security. Brompton will not be liable for any direct or indirect losses arising from the use of this material. Past performance is no guarantee of future performance and the value of investments, and the income from them, may fall as well as rise.