LAST WEEK IN A NUTSHELL
We have trimmed our equity exposure in the light of the most recent information and the sharp market rebound. We do not see an exit strategy in Europe yet and there is a lack of visibility on the epidemic outbreak in the US and the economic impact of containment measures. In the fixed income universe, we remain cautious about exposure to government rates in Europe as central bank buying and deterioration in public finances will be huge. Credit and High Yield spreads have spiked but our strategic views have not changed. We stay diversified via alternative strategies. We keep our strategic stance on Emerging debt and we continue to hedge via gold and the JPY, among others.
Given the lack of visibility, our equity exposure is slightly underweight.
We are underweight bonds, keeping a short duration and diversify out of government bonds. The current environment has the potential to create opportunities on bond markets as well.