Little has changed from a valuation perspective when compared to the last rebalance point at the beginning of July. Although, equities remain a little more expensive than they were in April following the rally from the start of the year. The biggest relative movers were UK, small caps and Asia ex Japan, reflecting the challenges impacting these particular areas.
The UK market is now at the most significant discount to global equities that we have seen over the last several years. Ongoing disruption in domestic politics mean that investors continue to shun the asset class and the pound.
Overall, while equities do not appear cheap, they are certainly not expensive when compared to their own history or other asset classes. This is most prominent when comparing equities against fixed income, which has become significantly more expensive over the quarter. This underlines our continuing overweight to equities.