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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  • Federal Reserve raised rates in December 2016; further monetary tightening expected in 2017
  • Central banks in aggregate still expanding monetary support and governments increasing fiscal stimulus
  • Votes for Brexit and Trump signal move away from “globalisation” and could spell political instability, particularly in Europe
  • Government bond yields rising from historic lows
  • Inflation rising in developed economies
Equities
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  • Equities should perform well as inflation rises from subdued levels
  • Monetary and fiscal easing policies are supportive
  • Market leadership change as “value” stocks outperform companies with stable cash-flows and high barriers to entry, the so-called “bond proxies”
  • Commodity-related companies perform strongly
  • Emerging markets recover after Trump election despite renegotiation of or withdrawal from trade treaties
Bonds
true
  • US inflation remains below central bank target but now rising because of near-full employment and rising industrial commodity prices
  • UK inflation may rise swiftly as sterling weakness compounds impact of rising energy prices and strong employment
  • Bank of England raises 2017 growth forecast close to pre-EU referendum level as economy proves resilient
  • Local currency emerging market bonds attractive because of local currency strength and government capacity to cut interest rates
US
true
  • Trump policies of cutting taxes, increasing infrastructure spending and “putting America first” support domestic equities
  • Financial stocks to benefit from improving profitability as bond yields rise and regulation reaches a high-water mark
  • Strong labour market, with unemployment below 5%
  • Consumer confidence high as a result of cheap fuel and higher employment
UK
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  • Economic growth and consumer spending resilient after Brexit referendum
  • Theresa May commits to “no deal” with EU rather than a “bad deal”. Trump offers an early trade agreement and strengthens UK negotiating position
  • Manufacturing data strengthen as sterling’s fall improves UK export competitiveness
  • UK real incomes face squeeze from rising import prices
Europe ex-UK
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  • Political uncertainty remains as minority parties challenge EU
  • Quantitative easing, euro weakness and low energy costs support eurozone equities
  • Unit labour costs show some convergence but not for all markets
  • Eurozone unemployment has fallen in aggregate but country-level disparity significant
Japan
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  • Renewed yen weakness relative to dollar leads to stockmarket gains
  • Bank of Japan may announce further monetary policy action following recent fiscal easing
  • Tokyo valuations still cheap relative to other stockmarkets
  • Japanese voters decisively back “Abenomics” in July 2016
China
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  • Renminbi depreciations in August 2015 and January 2016 sparked global deflation fears.
  • Renminbi now more competitive
  • People’s Bank cuts interest rates, reduces bank reserve requirement ratio and allows currency to weaken to support economy. Further policy action anticipated
  • Impact of high debt levels on public and corporate sectors uncertain
Asia Pacific ex-Japan and emerging markets
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  • Equity markets generally supported by valuations
  • Equities recover post-Trump election despite increased risk of US protectionism
  • Fall in US oil output and Opec accord contribute to stronger commodity prices, benefitting commodity exporters
  • India benefits from cheap energy and political reforms
Hedge funds
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  • Disappointing performance
  • Fund selection is critical
  • 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 December’s US interest rate rise
  • Gold miners sensitive to gold price movements
  • Chinese central bank purchases lower than expected
  • India acts against gold hoarding
Commodities
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  • Supply-side shock in 2014 leads to major oil price fall as producers compete for market share
  • Reduction in US output reduction leads to partial oil price recovery
  • Opec production accord reduces risk of renewed oil price weakness
  • Commodity prices are sensitive to Chinese demand
Property
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  • Financial Conduct Authority invites comments on “illiquid assets and open-ended investment funds” discussion paper after post-EU referendum suspension of some property funds
  • Brexit may lead to falling demand for City offices
  • Higher 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 for foreign buyers
  • Weak pound may stimulate economic growth and increase rental demand in the 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.