OMPS: Tactical Trade
Read our tactical trade update here
Over the 3rd and 4th of December, we completed a tactical asset allocation trade and full rebalance of the OMPS portfolios.
Here is a summary of the changes:
- We implemented a new tactical trade increasing our exposure to the Omnis UK Smaller Companies Fund and decreasing our exposure to the Omnis Japanese Equity Fund. More attractive earnings estimates for UK smaller companies and an expectation of diverging interest rate paths (UK lowering and Japan increasing) we believe will drive a relative underperformance of the Japanese equity market versus UK smaller companies.
- Our underweight position in the Omnis US Smaller Companies Fund was closed and we increased our underweight position in the Omnis US Equity Leaders Fund. We believe that deregulation from the incoming US administration is expected to benefit smaller companies more. We also see valuations for US Large-Cap equities as historically expensive and unattractive.
- In Fixed Income, the portfolios remain overweight in government bonds both UK and global, and underweight in Sterling Corporate Bonds. We think the current environment of lowering inflation and reductions in interest rates will be more beneficial for government bonds versus corporate bonds which we also view as expensive.
