Julius Baer has moved from underweight to neutral on UK equities, but does that mean the investment case for Britain is improving?
In this episode of the Asset Allocator podcast, Thomas Watts, MPS portfolio manager at Julius Baer, joins Aamina Zafar and David Thorpe to discuss the firm's latest asset allocation decisions and the opportunities and risks facing global investors.
Watts explains why the composition of the FTSE 100 makes UK equities an attractive diversifier against US technology stocks, even as concerns persist over UK inflation, interest rates and economic growth. The trio also examines whether the US stock market rally can broaden beyond the Magnificent Seven, how investors can manage exposure to the AI trade, and why Julius Baer is increasing allocations to Europe and emerging markets.
Elsewhere, Watts discusses the case for emerging market debt, the role of active and passive investment strategies, and why commodities remain an important hedge against inflation.
Listen for insights into portfolio construction, global equity markets, fixed income and investment diversification.
Timestamps
00:00 - Why Julius Baer has increased its UK equity allocation
04:40 - US equities and the economic outlook
09:06 - Diversifying beyond US equities and AI
10:12 - Is emerging market diversification becoming harder?
13:11 - Government bonds, investment grade and duration
14:26 - Can commodities protect portfolios against inflation?
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