Outlook at a glance

Asset classes Current view 3 Month Change  
Equities     Tax cuts have prolonged the cycle in the US, while other markets are attractively valued. Equities are still the place to be.
Bonds     Yields are headed higher but at a glacial pace. Bonds can therefore continue to provide diversification benefits and some income.
Property     The balance between risk and reward in commercial real estate is no longer favourable. Finding a sustainable and reliable income is too hard now.
Commodities     Some commodities exposure can help balance a portfolio and the asset class tends to do well at this ‘overheat’ end of the cycle.
Cash     Cash becomes more attractive in its own right as interest rates rise. In the meantime, it provides dry powder in the event of volatility.
Equity Regions Current view 3 Month Change  
US     Tax cuts have taken the edge off the US’s previously high valuations. In an uncertain world, America is the favoured port in the storm.
UK     Investing in the UK is all about international exposure and income. Domestic stocks are unattractive while Brexit remains unresolved.
Europe     Valuations are reasonable and growth continues but trade wars cast a shadow over a region that depends so much on exports.
Asia Pacific ex-Japan     This is a contrarian call that may be too early. But this summer’s falls make Asian and emerging market equities look good value.
Japan     The best risk and reward balance of all the equity regions. Decent growth prospects are not accurately reflected in Japan’s cheap stock market.

Key

Current View:
  Positive,   Neutral,   Negative

3 Month Change (since the previous Investment Outlook)
  Upgrade,   Unchanged,   Negative

Important information: Please be aware that past performance is not a reliable indicator of what might happen in the future. The value of investments and the income from them can go down as well as up, so you may not get back what you invest. When investing in overseas markets, changes in currency exchange rates may affect the value of your investment. Investments in small and emerging markets can be more volatile than those in other overseas markets. Reference to specific securities or funds should not be construed as a recommendation to buy or sell these securities or funds and is included for the purposes of illustration only. This information does not constitute investment advice and should not be used as the basis for any investment decision nor should it be treated as a recommendation for any investment. Investors should also note that the views expressed may no longer be current and may have already been acted upon by Fidelity. Fidelity Personal Investing does not give personal recommendations. If you are unsure about the suitability of an investment, you should speak to an authorised financial adviser.

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