Parmenion have told us they’ve taken a commodities position in response to the Israel-Palestine conflict.
Jasper Thornton-Boelman sees the possibility of a wider escalation across the Middle East as a potential catalyst for another oil price spike, which could raise energy prices and reignite inflationary pressures.
Parmenion will become only the fifth house to hold any commodities at all, with overall allocation to raw materials among DFMs a mere 0.37 per cent.
A 3.5 per cent allocation to commodities forms a part of their wider strategy to prepare for the worst and plan accordingly.
The Bath-based platform is standing by its predictions for recession in the US, which many have predicted without it having materialised yet.
As such Thornton-Boelman has become ever so slightly less bearish, as timing the market has proved difficult.
He upped Parmenion’s US equity exposure by 1.5 per cent to a new overall weighting of 16.75 per cent, funding it with a cut to European equities where there are, in his view, ‘more risks than opportunities’.
Europe now makes up the lowest allocation of all its regions – comprising just 2 per cent of all its equities.
“Whether it’s interest rates, inflation, or a recession - expectations continue to be pushed further and further out. When you’re positioned for change, this can be a painful wait,” he says.
But Parmenion is sticking to its guns and the team sees a hard landing as the most likely outcome for the US economy.
“Our late cycle view of the economy hasn’t changed, we continue to see strong reason for a recessionary environment ahead, and in turn favour fixed interest over equities.”
