The rally in cyclical ‘value’ stocks paused for breath in February, as investors took a more cautious tone and switched their attention back to defensive areas. In this article, Jacob de Tusch-Lec, manager of the Artemis Global Income Fund, explains how he has positioned the portfolio, given the many economic, geopolitical and policy risks that remain.
The powerful rally in cyclical “value” stocks and financials seen in the second half of last year – and which carried over into January – paused for breath in February.
Although global equity indices crept higher, the gains tended to be led by more defensive areas. In this, the equities seemed to be following the more cautious mood evident in the bond market.
Having risen sharply since the summer, yields on safe-haven government bonds, including 10-year US Treasuries, fell slightly on the month. Yields on two-year German government bunds, meanwhile, hit new lows. On first view, that seems counter-intuitive …