The political landscape in the UK has shifted significantly in the last three months, but the future remains as uncertain as ever, especially in relation to Brexit. We continue to monitor the situation, and have further reduced our exposure to UK assets as a defensive measure.
The prospects for the addition and withdrawal of trade tariffs between the US and China, and others, have continued to move global markets, including weakening areas of the global economy in some regions too, significantly Europe, due to its heavy reliance on trade. However, we also see potential for more positive economic news in the near future as growth in the service industry may provide economic stability for countries that have previously relied on manufacturing.
Should this deterioration persist we may have to prepare for a slowdown in economic growth. However it remains to be seen whether or not a recession will emerge.
Throughout 2019, we have maintained a lower-than-average risk level in our Balanced, Conservative and Cautious portfolios. Despite this, they have outperformed their respective benchmarks, as we have been very selective in which risks we were willing to take. We hope to continue this trend by ensuring that our first priority is to preserve values by limiting the effects of market falls, even if this means we are likely to see more modest returns in the short term.
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