Robin Perry

While global tariffs pose a headwind to global growth and trade, and potentially upside risks to inflation, we think the impact could be less than many fear. Our expectations therefore remain for the global economy to grow 3-3.5% over the next couple of years and for inflation to stay reasonably close to target ranges, allowing central banks to cut rates as necessary to stimulate growth. We think this is still a supportive environment for risk assets and, given our view that valuations do not look overly demanding, our equity allocations are at the upper end of strategic ranges. Credit spreads are narrow versus history however default rates remain low and bonds still offer relatively attractive yields looking ahead, as well as potentially valuable diversification benefits. We also have allocations to alternatives, primarily equity market neutral strategies, which have been very successful in providing above cash returns with minimal correlation with traditional assets.

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