Paul Jackson, head of asset allocation at Invesco. (© DR)
At the same time, the head of asset allocation increased its exposure to government bonds and cash.
According to Paul Jackson at Invesco, the probability of a next recession has increased significantly, especially in Europe facing an energy crisis.
The director of asset allocation within the management company evokes the past errors of central banks which force them to catch up with inflation.
As a result of rising prices, real income growth (excluding inflation) turned negative and savings reserves were consumed. And the restriction of credit is fueling the deterioration of the indices of “economic surprises”.
Paul Jackson has therefore reduced his exposure to equities to 40% of his asset allocation (for a neutral level at 45%).
Fewer stocks and more bonds
Several positions have been reduced in the model portfolio, on European equities at 4%, British equities at 5%, Japan at 5%.
US companies remain “underweight” at 16%, but Chinese stocks (4%) and those from emerging countries (10%) are “overweight”.
On the other hand, the manager increased the weighting of government bonds to 30% (neutral position at 25%), favoring American public bonds (10%) and European bonds (9%).
The weight of good quality private debt rated “Investment Grade” has fallen slightly, but it remains
