Omnis Agility - Tactical Trade Update
Omnis Agility combines the Omnis range of funds with carefully selected Exchange Traded Funds (ETFs) that give us access to additional investment opportunities. This week we made some changes to the portfolio to reflect a change in our tactical asset allocation positioning. In this document, we detail the thinking behind these trades.
Summary
We invested in one new ETF, changed the weights of some investments across the Omnis Agility range and rebalanced all portfolios. The areas we have increased investments in are European Equities and Indian Equities.
European Equities
Both monetary and fiscal policies in Europe are likely to be supportive of the economy into 2026. Inflation is relatively subdued in absolute terms but especially relative to the US and the UK. This will allow the European Central Bank to keep reducing interest rates. Additionally, the new German government has shown a willingness to increase defence and security-related spending. The European Commission is trying to develop this into a wider European stimulus effort. We have also begun seeing investors take profits out of US equities and reallocate funds to Europe, which should also help drive European equity markets higher. We have increased our exposure to the Vanguard FTSE Developed Europe ex UK UCITS ETF in portfolios.
Indian Equities
The Indian economy continues to grow robustly at over 6% per annum and forward-looking economic indicators continue to point to stronger growth than the broader emerging markets. Inflation remains under control and the central bank has actually moved to a more supportive stance for the economy and has recently been reducing interest rates. Whilst at first glance, the indian equity market may look expensive, the combination of the change in central bank stance, the international energy complex being under downward price pressure and foreign investor flows turning more supportive is likely to propel the India stock market to new highs. We have invested in the iShares MSCI India UCITS ETF.
Changes in fixed income assets
We have changed the global fixed income investments in the portfolio to reduce our under-exposure to the US Dollar. Whilst we expect the combination of economic activity, monetary policy and fiscal policy in the US will keep downward pressure on the US Dollar for now, given the strong depreciation we have seen already, we have reallocated some fixed income investments to reduce our current under-exposure.
