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Investment Committee analysis and investment decisions

Each quarter, our Investment Committee dives into the global economic data to assess the performance of Arbuthnot Latham Investment Management’s (ALIM) portfolios and plot a path for the months ahead.


27th June 2024


Here are their key insights into what happened in the markets at the start of the year.  

You can read the full report here to find out about the changes we made to our investments.

Global growth remained resilient in the first quarter while inflation data proved much more challenging. However, equities rose as investors appeared to shift their focus from the current inflation challenges to improved growth prospects on the horizon. 

As has been the case in recent years, the resilient US economy powered global gains. Its labour market remains tight and encouragingly, manufacturing data is picking up. 

Elsewhere, it has been a different picture. Europe and the UK have reported particularly weak economic performance in the past 12-18 months. But there were signs of improving business activity at the start of the year, with the Purchasing Managers’ Index (PMI) data and sentiment indicators edging higher. 

The global manufacturing sector also appears to be gathering momentum. Rising Asian exports and this year’s broad-based commodity rally suggests the manufacturing cycle could continue to recover and aid global growth. 

While equities have performed well, fixed income investors have had a tougher time. Persistent inflationary pressures in the US prompted a more hawkish stance from the US Federal Reserve. And fewer rate cuts are now expected, which pushed fixed income yields higher. 

In contrast, the European Central Bank (ECB) has adopted a more dovish stance, as Eurozone inflation continued to make progress towards the ECB’s target of 2%. 

This divergent stance from developed market central banks has been a key factor in currency fluctuations as evidenced in the dollar’s strength due to rising US bond yields compared to peers. 

Head of Investment Research, Peter Doherty said:

“During the previous quarter, we observed a differentiation between the drivers of the equity and bond markets. Equities have become more comfortable in a higher rate environment due to resilient global economic growth, prompting us to increase our equity allocation while reducing our investment grade fixed income exposure.


Over the past quarter we made six key changes to our portfolios:  

  • Decreased our exposure to investment grade corporate debt 

  • Increased our equity allocation, focusing on attractively valued cyclical opportunities 

  • Increased our allocation to EU equities 

  • Within equities, we reduced our allocation to Japan in favour of European smaller companies 

  • Increased our allocation to commodities 

  • Increased our allocation to hedge funds. 

Read the full Investment Committee Series to find out more about why we made these changes.


Investment Committee Series

Our Investment Committee share their key decisions and outlook for Q2 2024 here

Investment Committee Series Q2 2024 brochure

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