With US elections happening now and Bank of Englandʼs rate choice coming up this thursday‚ market-watchers are re-thinking their strategies
The bond-market landscape looks promising – when rates drop bond prices tend to go up (which is good news for fixed-income fans). Some top-tier options in the corporate bond space include funds from TwentyFour and M&G Strategic; while government bonds could work as a safer bet
Real-estate investment trusts might get a nice boost too: lower rates mean cheaper loans which helps property markets grow. The TR Property Investment Trust stands out here with its 0.82pc fee (thats lower than most); while Cohen & Steers and CT European Real Estate funds are worth checking out
- Tech companies benefit from cheaper borrowing
- Consumer goods firms see better profit margins
- Financial sector might face some pressure
- Oil and other commodities could lose some appeal
For stock-market fans‚ tech and growth companies usually do well when rates fall – they can borrow money easier to fund their plans. Good picks here include Evenlode Global Income and Guinness Global Innovators funds. On the flip side commodities might not be as attractive since people dont need inflation protection as much
The markets shifting patterns mean its time to think about moving some pieces around. Different assets react in their own ways to rate cuts: bonds might jump up real-estate could get stronger and some stocks might shine while others take a back seat