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.

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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.

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

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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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  • US, UK and eurozone inflation rose from low levels in 2017
  • Monetary policy remains accommodative.
  • Federal Reserve and Bank of England raised interest rates in 2017 and further increases likely in 2018
  • European Central Bank and Bank of Japan still expanding monetary support
  • Global economy growing steadily; manufacturing leading indicators signal acceleration, consumer spending strong
Equities
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  • Equities should perform well, with economic growth stead and inflation rising from subdued levels
  • Monetary and fiscal easing are positive for risky assets
  • Cyclical companies may outperform expensive “quality” companies as inflation rises
  • Valuation support for equities in Europe ex-UK, Japan and some emerging markets
  • US valuations high but may persist amid low inflation and steady economic growth
Bonds
true
  • US inflation has risen because of recovery in industrial commodity prices and is close to central bank target
  • Inflation may rise further than anticipated as near-full employment fosters wage inflation
  • Bank of England policy remains highly accommodative notwithstanding inflation significantly above Bank of England target
  • Emerging market bonds may perform well as inflation falls in some economies such as Brazil and India
US
true
  • Few signs for now that tighter monetary policy has materially impacted economy as witnessed by senior loan officer surveys
  • Fiscal stimulus from newly-signed Tax Cuts and Jobs Act should promote consumer and business spending growth
  • US financials to benefit from improving profitability as US longer-dated bond yields rise more than shorter-dated yields
  • Consumer confidence high as a result of cheap fuel and higher employment
  • Dollar weakness in 2017 supportive for US exporters
UK
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  • Rising inflation sends sterling higher on a trade-weighted basis
  • Further rises may reduce UK’s export competitiveness
  • Consumer spending may be squeezed by higher inflation as real wage growth remains subdued
  • Bank of England raised rates in November 2017 but may be too dovish on likely pace of further monetary tightening
  • Brexit talks progress, with discussions moving on to trade
Europe ex-UK
true
  • European Central Bank quantitative easing set to continue this year and no interest rate rise anticipated until sometime thereafter
  • Eurozone leading indicators and economic growth strengthen
  • Unemployment falls but national disparities remain
  • Political risk somewhat lower but voter support for anti-European Union parties remains a risk, particularly in Italy
  • Greece may require further debt forgiveness
Japan
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  • Bank of Japan policy of near-zero 10-year government bond yields intended to weaken currency and stimulate inflation
  • Japanese equities lowly valued relative to other equity markets
  • Yen a safe-haven asset at times of market stress
  • Abe could be Japan’s longest-serving post-war prime minister following October election victory
China
true
  • Currency falls in August 2015 and January 2016 sparked
  • fears of global deflation
  • Renminbi regains competitiveness since 2016
  • Economic growth close to 7% official target
  • Impact of high debt levels on public and corporate sectors unclear
Asia Pacific ex-Japan and emerging markets
true
  • Some emerging markets benefiting from stronger global trade
  • Weaker dollar and fewer US protectionist measures than feared may buoy equities in 2018
  • Stronger commodity prices benefit commodity exporters
  • Some regional equity markets supported by valuations
  • India benefits from government reforms, which have increased ease of doing business
Hedge funds
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  • Returns have disappointed since credit crisis
  • Some funds may deliver positive risk-adjusted returns and reduce portfolio risk as longer-dated bonds and some equities appear expensive
  • Rising inflation may lead to rotation from “expensive defensives” to more lowly-valued cyclical stocks and increase the opportunities for long/short managers
  • Undertakings for Collective Investment in Transferable Securities (UCITS) regulation a Brompton requirement
Gold
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  • Gold retains safe-haven attractions at times of heightened volatility
  • Gold demand may fall among financial buyers as inflation and interest rates rise, increasing opportunity cost of holding nil-yielding assets
  • Gold mining shares highly sensitive to gold price changes
  • Chinese central bank purchases lower than expected
  • India introduces policies to discourage gold hoarding
Commodities
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  • Supply-side shock in 2014 led to oil price fall as producers competed for market share
  • US oil output fall in 2016 led to oil price recovery but US oil output rose in 2017
  • Opec and Russian production accord reduces risk of renewed oil price weakness
  • Commodity prices sensitive to Chinese demand
Property
true
  • Brexit may reduce demand for London offices
  • Higher UK inflation may lift bond yields and reduce demand for longer-duration assets such as commercial property
  • Financial Conduct Authority invites comments on “illiquid assets and open-ended investment funds” paper in response to post-EU referendum suspension of some open-ended funds
  • Weak sterling 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.