Iveagh: investment environment too good to be true

Beverley agreed the investment environment is ‘too good to be true in the short term.’

‘It’s been a jolly nice run,’ Wyllie added.

‘There’s certainly a risk in bonds at the moment,’ Beverley said, while the CIO added there is a risk of government bond yields rising.

Earlier in the year, the team trimmed overall bond exposure to 23.2% ‘just to have no more than we have to have for portfolio defence’.

‘We have taken government bond weightings down to 7.5% so we are 2% underweight there,’ Wyllie said, although the weighting is still classed as ‘adventurous’.

‘You need a good reason to hold anything less than an adventurous weighting in government bonds because you need something there just for portfolio protection – but I don’t want to have any more there than we have to,’ he explained.

Given the mix of positive signals and uncertainty over sentiment, Wyllie said he did not see a reason to up risk at the moment.

‘I don’t think markets are getting carried away with themselves that much. I don’t feel under any pressure for us to put more risk in the profiles because I think we have got enough.’