How we’re thinking about Russia/Ukraine and our investment strategy

• Markets tend to overreact. Even if we remain watchful, history has showed that major geopolitical events don’t typically affect the global investment landscape over a 6-12 months horizon. There’s a clear pattern of fundamentals reasserting themselves after event-driven market corrections.
  
  
• Russia’s escalation increases geopolitical uncertainty and market volatility. While this could further boost inflation and slow growth, especially in Europe via higher oil/gas prices, we still believe it’s unlikely to trigger broad-based economic and earnings weakness globally.
  
  
• Our tactical asset allocation remains unchanged. We are tactically overweight US equities over bonds and emerging market equities over global equities, plus selected high-yielding credit exposures over lower-yielding bonds.
  
  
• Our investment philosophy for direct equities is based on long-term investment. We use what we consider quality growth companies with strong balance sheets. This is designed to minimise as far as possible the impact of unpredictable events that are outside companies’ control.
  
  
• Our Global Sustainable Equity Model is weighted in-line with its benchmark, with a two-thirds/one-third split between North America and Europe. However, our European holdings are mostly global businesses rather than focused on the European economy.

Authors:

• Bill Street, Group Chief Investment Officer
• Daniele Antonucci, Chief Economist & Macro Strategist

This document has been prepared by Quintet Private Bank (Europe) S.A. The statements and views expressed in this document – based upon information from sources believed to be reliable – are those of Quintet Private Bank (Europe) S.A. as of 24 February 2022, and are subject to change. This document is of a general nature and does not constitute legal, accounting, tax or investment advice. All investors should keep in mind that past performance is no indication of future performance, and that the value of investments may go up or down. Changes in exchange rates may also cause the value of underlying investments to go up or down.

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