Last week stock markets followed the same pattern from the week before; enjoying a positive first three days before falling off towards the weekend to finish in negative territory. The release of the Fed minutes were closely analysed, and tensions in Ukraine made for a compelling narrative. Market sentiment has been roiled by the developments, and the weekly AAII investor sentiment survey released on Thursday showed that less than 20% of respondents are bullish. This is of course just one metric that is an input into our investment process, but sentiment is approaching extreme levels.


Overall, as we observe investment markets through the lens of our top down active investment process, we believe that maintaining an active, flexible approach is warranted. Ultimately whilst the Ukraine situation is keenly in focus at this juncture, the shifting monetary policy and inflation backdrop, which can be characterised as ‘fundamentals’, is likely to continue to have the largest influence on risk asset price levels. Whilst volatility levels can come in and out of market focus throughout the cycle, it is ever present. Ultimately, we do believe that the secular equity bull market remains intact. Therefore, late last week we made a small addition to our equity holdings across our multi-asset funds.