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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  • Government bond yields rise from historic lows
  • Federal Reserve raised rates in June 2017 for the fourth time since 2015
  • Other major central banks still expanding monetary support
  • Global economy growing steadily
  • Political risk subsides as centrist candidates succeed in European elections but US political stasis remains
Equities
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  • Equities should perform well as inflation rises from subdued levels
  • Monetary and fiscal easing are positive for risky assets
  • 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
  • Cyclical companies may outperform expensive “quality” companies as inflation rises
Bonds
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  • US inflation rises because of near-full employment and industrial commodity price recovery but remains below central bank target
  • Federal Reserve has raised interest rates and may shrink balance sheet later this year but pace of monetary tightening expected to be gradual
  • UK inflation above Bank of England target. Minority of monetary policy committee members favour rate rise
  • Emerging market bonds may perform well as inflation falls in economies such as Brazil and India
US
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  • Trump unable as yet to implement policies of cutting taxes, increasing infrastructure spending and “putting America first”
  • US financials to benefit from improving profitability as bond yields rise
  • Strong labour market – unemployment below 5%
  • Consumer confidence high as a result of cheap fuel and higher employment
  • Dollar weakness in 2017 supports exporters
UK
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  • Manufacturing leading indicators strong after 2016 sterling fall increased export competitiveness
  • Consumer spending may be squeezed by higher inflation as real wage growth remains subdued
  • Brexit negotiations underway but economic impact unclear
  • Bank of England may raise rates earlier than anticipated as employment data strengthen
Europe ex-UK
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  • Central bank policy supportive – quantitative easing set to continue until 2018 and no interest rate rise anticipated until later
  • Eurozone leading indicators and economic growth strengthening
  • Unemployment down but national disparities remain
  • Political risk lower but popular support for anti-EU 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 valuations low relative to other big equity markets
  • Yen a safe-haven asset at times of market stress
  • Japanese voters back continued Abenomics in 2016 but Abe’s popularity now waning
China
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  • Currency depreciations in 2015 and 2016 sparked fears of global deflation
  • Renminbi has since regained competitiveness
  • GDP growth close to 7% official target
  • Impact of high debt levels on public and corporate sectors unquantifiable
  • Quinquennial party congress may see President Xi further consolidate power
Asia Pacific ex-Japan and emerging markets
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  • Weaker dollar and fewer US protectionist measures than feared buoy emerging market equities
  • Stronger commodity prices benefit commodity exporters
  • Some equity markets supported by valuations
  • India benefits from cheap energy and political reforms
Hedge funds
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  • Sector performance disappointing
  • Fund selection paramount
  • Limited investments on behalf of Brompton clients
  • 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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  • Safe-haven attractions at times of heightened volatility
  • Gold demand may fall among financial buyers as inflation and interest rates rise as opportunity cost of nil-yielding assets increases
  • Gold miners sensitive to gold price movements
  • Chinese central bank purchases lower than expected
  • India introduces policies to discourage gold hoarding
Commodities
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  • Supply-side shock in 2014 resulted in major oil price fall as producers competed for market share
  • US oil output fall in 2016 led to price recovery but US production has revived
  • OPEC production accord has reduced risk of renewed oil price weakness
  • Commodity prices remain sensitive to Chinese demand
Property
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  • 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” discussion paper in response to post-EU referendum suspension of some funds
  • Weak sterling increases attraction of UK properties to non-sterling buyers and may stimulate rental demand over 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.