Hopes of an autumn resolution
Bond yields in Spain and Italy have fallen from the highs seen
in mid-July due to speculation that the European Central Bank (ECB)
is ready to step up its efforts and intervene once more in bond
markets. Minutes of the recent Federal Open Market Committee (FOMC)
meeting hinted at further quantitative easing (QE) in the US as the
Federal Reserve keeps one eye on next year's looming
'fiscal cliff'.
As we enter an important few months that may settle the fate of
the eurozone, we remain cautious in the near term, given the risk
that policymakers will again fail to deliver. While many equity
markets look attractively valued on a relative basis, our long-term
focus remains on good quality companies with robust business
models, global franchises and high and sustainable dividend yields.
We are also focusing on a suitably diversified mix of index-linked,
conventional and good quality investment-grade corporate bonds. Our
stance is designed to
