Our view at a glance

Asset classes Current view 3 Month Change  
Shares     Shares have reversed much of the fourth quarter slide on interest rate hopes. Earnings must deliver to hold onto the gains.
Bonds     Unusually, bonds and shares have risen together this quarter. Things will have to get quite a bit worse to justify yields at these low levels.
Property     There is a mismatch between the slowing European economies and demand for commercial real estate. The yields don’t repay the risks.
Commodities     The Trump re-election campaign will demand a lower oil price. Saudi Arabia is not an equal partner in this relationship and will likely oblige.
Cash     After the rally in risk assets, cash once more looks like playing a useful role in a well-balanced portfolio. Keep some powder dry.
Equity Regions Current view 3 Month Change  
US     After the New Year rally, the risk/reward balance is less good than it looked at Christmas. A lot hangs on the Fed staying loose.
UK     At the time of writing, Brexit remains up in the air. The uncertainty is well priced-in, however, and the UK is too cheap. Still attractive.
Europe     Europe looks very interesting from a contrarian point of view. Compared with global shares and fixed income alternatives, the region is cheap.
Asia Pacific ex-Japan     The scale of the rally in China this year makes it hard to chase shares further for now. A resolution to the trade tensions is needed.
Japan     Still cheap, although the worsening outlook makes Japan seem less of an obvious buy than three months ago. Good long-term contrarian play.


Current View:
  Positive,   Neutral,   Negative

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


Important information:
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. Please be aware that past performance is not a reliable indicator of future returns. 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. Investors should also note that the views expressed may no longer be current and may have already been acted upon by Fidelity. 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 personal recommendation for any investment. If you are unsure about the suitability of an investment, you should speak to an authorised financial adviser.

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