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Although caution is warranted, high yield continues to offer attractive opportunities.

A soft landing or a hard landing? As we look to 2024, markets are still searching for an answer to this key question. In the minds of many investors either of these two very distinct outcomes has a high probability of occurring. Yet they would lead to diametrically opposite asset allocation decisions, so trying to solve categorically in favour of either could leave one exposed to substantial risks in the event of being wrong.

Each month the team behind our sustainable equity funds answer five topical questions in five minutes – or sometimes a little over! They tackle questions on sustainability issues, introduce new stocks and discuss the impact of market conditions.

In the latest Strategic Thinking video, Colin Finlayson, co-manager of the Aegon Strategic Bond strategies reviews what was a very challenging month for global bond markets, but why he believes the peak of the interest rate cycle and falling inflation make the outlook even more attractive. He also gives an update on how we are allocating against this backdrop and discusses why flexibility will be key.

We were happy to see a new application of our adopted principle: “The greenest building is the one not built”. Not so long ago we read that the approval for demolishing and rebuilding the M&S store on Oxford Street, London had been refused by the secretary of State, Michael Gove. The main argument was that it: “fails to support the transition to a low carbon future and would overall fail to encourage the reuse of existing resources, including the conversion of existing buildings”. Ironically, we also read about a just-completed residential development: Mast Quay Phase II, which is to be demolished as ordered by the local council, although in this case it is the developer that aims to keep the building intact (surely for economic reasons). The tables have turned. Nonetheless, in helping to settle this latest issue, we would like to quote the senior director at Expedition Engineering: “did anyone stop for a second to consider the waste of embodied energy”.

In the latest Strategic Thinking video, Alex Pelteshki, co-manager of the Aegon Strategic Bond strategies, discusses why bonds are back, after years of quantitative and monetary easing causing traditional income asset classes to be squeezed out.

Last week’s announcement by the UK Prime Minister to amend the UK’s net zero strategy, was disappointing from an environmental perspective. Among the changes announced was a delay to the ban on the sale of new internal combustion engine cars and gas boilers until 2035 from 2030. The measures have been widely criticised by climate activists and business leaders alike and must call into question the UK’s position as a global leader on climate change.