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T Bailey says currency rather than markets are key to return

Investor returns this year will come from tracking currency rather than reading the markets, says T Bailey’s senior analyst Elliot Farley.

Farley says that prospects of falls in sterling have encouraged the company to bolster its holdings in the US and Japanese markets.

He says: “For the past five years, people only really had to bother about what the markets were doing and almost ignore the currency.

“This year, it is more about the currency. Those who have had assets domiciled outside the UK have benefited from the weakness of sterling.”

T Bailey’s UK holding is 11 per cent underweight on its growth and cautious managed funds and has focused primarily on large-cap stocks over the past 12 months.

Last month, the firm began buying income funds across three of its portfolios.

Farley says: “Income-generating stocks had a bad time for the first seven or eight months of this year but have begun to come back into favour.

We will favour companies that generate good dividends to get us through the next 12-18 months and a lot more income opportunities are starting to present themselves in the UK market.”

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