Markets and economic data have been sending conflicting signals. Technology shares are being snapped up as new AI applications like Chat GPT burst onto the scene. But most of the rest of the global equity markets remain in the doldrums, and government bonds have had a drubbing. But there are plenty of reasons to be cheerful as we look to relax and enjoy the rest of the summer.
Investment Insights Q3 2023
11 July 2023
A new gold rush seems to have been triggered by the launch of ChatGPT. Our lead article takes a closer look at artificial intelligence (AI) and who the winners and loser might be as companies seek to make money from so-called generative AI.
Investors still face many challenges, but Japan has been an unexpected standout so far this year. Its equity market has been one of the top-performing in the world, and we see plenty of 'Eastern promise' still to come, as our second article highlights.
Over the past year, the status of UK government bonds, or gilts, as a safe haven for investors has been turned on its head. But as is often the case in investment markets, such extreme weakness can create future opportunity for investors. You can read more about why we see light at the end of the tunnel for gilts in our third feature this quarter.
As well as having the most attractive yields for many years, another emerging aspect of gilts that we explore in our next article on page 10 is the prospect for them to once again provide diversification benefits. We also consider which types of diversifying strategies are more likely to struggle in the current environment.
Our final article on page 12 takes a look at hydrogen, the most abundant of all the elements in the universe, and the hope that it might be a panacea in the quest for an emissions-free world.
Liz Savage and Ed Smith
Co-chief investment officers