Portfolio outlook

The EV Asset Model is designed with the intention of providing a basis for calculating asset weights through optimisation for a given strategy. Changes induced by model updates imply changes in asset allocations that are a good response to changes in prevailing conditions.

Cash loses out to combinations of gilts and equities in the short term because the potential extra return is too uncertain and a combination of bonds and equities offers better risk/reward, even at relatively short terms.

Corporate bonds have improved relative to gilts and gain significant allocations at their expense.

Among equities, UK and Emerging Market prospects are most improved and where these allocations have room to increase at the expense of the other equity classes they do.