Half full or half empty?

Is a half-filled glass of water half full or half empty? Some people see it one way, and some the other. My children say I always see it as half empty. Yet, markets can frequently and quickly flip from optimism to pessimism - and back again. Since my last monthly letter, global equity markets have suffered their largest sell-off in more than two years although economic and corporate fundamentals have not deteriorated much.

At a glance

  • „„„„Global equity markets have suffered the largest sell-off in more than two years, despite economic and corporate fundamental data not deteriorating materially.
  • „„„„We seek tactical positioning that can benefit when the markets are feeling more optimistic, while staying relatively protected when markets are feeling pessimistic.
  • „„„„We are keeping a positive view on risky assets and have added to our overweight position in US equities, after adding to US high yield last week.
  • „„„„At the same time, we have reduced exposure to EM equities because the region is experiencing weaker growth momentum, declining commodity prices and does not have much policy flexibility.

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