Can we define quality stocks in an era of change?

0:13James Burns: Hello and welcome to the FT Advisor podcast, the weekly series brought to you by FT Advisor. Each week we'll be joined by guests from the industry to discuss pressing market issues. I'm David Thorpe, Senior Investment Editor at FT Advisor. Today we are discussing the outlook for equities after what has been a turbulent but mostly upward trajectory over the past 12 months. And joining me to discuss the topic are Keith Barmer, Multi-Asset Portfolio Manager at Columbia Threadneedle, James Barnes who runs the Managed Portfolio Service at Evelyn Partners and Richard Saldana, Global Equity Fund Manager at Aviva Investors.

0:52James Burns: Richard, if we come to you first, after six eventful months of 2026, what are you most concerned about within equity markets?

1:02Keith Balmer: Yeah, well, it's certainly been eventful. Look, I think one thing that's certainly on our mind right now are the levels of concentration that you're seeing in indices, right? And, you know, you could think about this from a global perspective. You've got, you know, the US now that makes up almost two thirds of global indices. You could think about it from a sector standpoint, where obviously we know tech is very dominant in the market right now. It's 30 % of the global index. In the US index, the S &P 500 tech makes up almost 40 % of that index. And we all understand the underlying theme behind this, namely, obviously, the levels of hyperscalar capex expenditure that you're seeing right now.

1:35Keith Balmer: So, look, these levels of concentration, certainly historically, I mean, that 40 % is an interesting barometer. You look at it in the US perspective. Historically, when you get to those levels of market concentration, something that you don't tend to anticipate comes along and tends to break that. It's not to say that will happen, but it's certainly something people should be mindful of. So, look, I think we talk about diversification as being the only free lunch in investing, as per Harry Markowitz. And I think investors would probably do well to heat that right now.

2:02James Burns: Thank you, Keith. From your perspective as a multi-asset investor, you can obviously and do have exposure to equities, but you can do other things as well. What are you thinking about and what's worrying you within those equity allocations? I think broadly we're constructive in equity still. I think the fundamental backdrop is still pretty good. You've got positive growth everywhere, obviously looking better in the US. You've got unemployment numbers looking great. You've got a little bit of inflation around, but nothing too much to be overly concerned about. And so on that backdrop, and you've got earnings re-ratings coming through in a positive direction.

2:39James Burns: So overall, we like equities. So just to sort of expand on a couple of things that's been said in terms of if something was going to keep us up at night, what would it be? Well, you've got geopolitical shocks, which no one knows what they're going to be. But clearly under the certain under this U.S. administration, there have been quite a few geopolitical shocks that have happened. You've got very narrow supply chains. So whether that's in terms of energy, and we've seen that play out in the Middle East, You've got narrow supply chains in terms of the AI trade that's been going through. So that concentration risk that was talked about, that clearly will exacerbate moves.

3:17James Burns: And so far, we've seen those moves being exacerbated to the positive side. So everything upwards at some point, that concentration risk will go back the other way and come down. So one of the big things for us will be looking at the amount of capex spend. So at some point, I think the hyperscalers estimated, so if you take the big four hyperscalers, they're estimated their capex spend to be somewhere around about 600 billion this year. That is pretty much double what it was last year. And that's what's allowed the music to keep on going. If at some point those hyperscalers realize that the products that they're making, they won't be able to get the return on investment, then any good CEO, CFO will start to consider exactly how much capex they're going to spend.

4:00James Burns: and at which point, if the amount of capex comes down, that will clearly have a knock-on impact to the prices that people are giving for and the valuation levels that they're giving for individual equities in the marketplace at the moment. James, again, you're a multi-asset investor, so presumably you have different exposures, different levels of exposure to equity across the different portfolios and risk profiles, but what are you thinking about within those and what worries you?

4:25Richard Saldanha: You know, I agree with what the guys have said so far. I think the one thing that's not necessarily keeping me up at night, but it's something to be aware of, is this huge bumper amount of IPOs we've got either happening or coming down the pipeline. And we've just had SpaceX in the last 10 days, the biggest IPO in history. Did that add volatility to individual names quite possibly? And we've got Anthropic at some point. We've got OpenAI. And again, at some point, people were looking to raise money to buy into these. they're most likely to take money from what's done very well which is the you know the ai tech type names so that's something that is something to be aware of and that's just three ipos there's bound to be more um throughout the rest of the year thank you and james if we stick with you

5:11James Burns: for the second question when i asked each of each of you you know for a risk or something that's concerning each of you had a slightly different concern but one of the things they had in common is the risks are quite idiosyncratic. I mean, Keith referenced the geopolitical environment and, let's say, the quality of political leadership in the US. And then, you know, there's a war in Ukraine. There's the concentration risk in markets. So there are a lot of risks out there. Given the nature of those and how unpredictable some of those are, what does diversification look like within your equity allocation right now?

5:48Richard Saldanha: Yeah, I mean, we've always had a pretty balanced approach. I think even more so now it is having allocations to markets such as the UK and Japan, which aren't necessarily totally reflective of the AI trade. A year and a half ago, having some cheap exposure to emerging markets in Asia seemed pretty sensible. What's happened to Korea and Taiwan in the last six months shows that there's actually a pretty high correlation to what's going on in the US. So for us, it's being geographically diversified, but also within a multi-asset approach, we take having different styles of managers as well, be that growth managers, equity income managers, multi-cap or large cap.

6:32Richard Saldanha: So it is really just making sure we've got eggs in different baskets.

6:37James Burns: Keith, from your point of view, how do you think about that diversification question? Is it a valuation thing? You know, if all of the hyperscalers trade at high multiples, is diversification just buying things at low multiples or is it something more than that? No, I think it's been a long time since we looked at manager and just sort of went in and asked them to narrate what they thought their style was and then just took their word for it. So we think very much more in terms of sort of the underlying factor analysis. So looking at the positions that the underlying managers have and then understanding what is actually their factor exposure to that.

7:09James Burns: So there's two ways that you can sort of go from there. One of them is you can build a portfolio, which is to say, I want to have a deep value manager, combine that with a growth manager, combine that with maybe a quality manager, maybe sort of go through in terms of size. So you get a large cap manager and a small cap manager and you have sort of the extremes. That's one way of a very sensible way of putting a portfolio together. The other way is putting together managers that are not specifically extreme in their views, but do still take an active share in the market. And so inside the universal portfolios, we take more of the latter option.

7:47James Burns: So our main equity manager within Universal Portfolios has a broad remit, but inside the holdings, they have an equal risk weighting between growth, value and quality. So we get a little bit of everything and not too much extreme, which means to say that I see an awful lot of portfolios which are 35 individual high conviction portfolios, which is great when it works really well, but it's terrible when it doesn't work very well. And so therefore, that's sort of in that first situation, we need to balance that off against something that is going to do well. I prefer to have just broad based exposure in terms of the where we're actually looking at the moment.

8:27James Burns: We are playing into this theme. So so we are overweight emerging markets. We are overweight. We are overweight. Japan, we're overweight equities in general. We're underweight Europe. And that's where a little bit of our diversification has come from in terms of thinking about the effects of the Middle East conflict on to short term equity prices. So try to get broad diversification as opposed to narrow diversification. Thank you. And Richard, you're the one around the table who runs an equity strategy. How do you think about diversification when you build that? And is it multi-factor? Is it valuation?

9:00James Burns: Is it something else?

9:01Keith Balmer: Yeah, so I think there's a couple of ways to think about diversification. So one is certainly from a regional perspective. I mean, we've highlighted obviously the US is certainly dominant right now. But look, from a portfolio standpoint, we have around half of our portfolios invested in the US. It's clearly still very attractive from a growth perspective. You look on the returns on capital of the companies in the US that are far superior to many other regions. But that point around diversifying, looking outside the US, because you can find really good companies, whether it be in Europe, here in the UK, emerging markets, Japan, and often the valuation multiples are cheaper relative to the US counterparts.

9:35Keith Balmer: So that's one aspect. You can think about the sector aspect as well. Again, touched on obviously the dominance of tech right now, but there's lots of other sectors outside of that, whether it be sectors such as consumer staples, healthcare, you've got companies here that are delivering very resilient earnings and cash flows right now. And actually, the stocks are trading at what we would say are pretty attractive multiples if you look at those sectors, certainly relative to the broader market there. So those are two ways you can think about that. The other point I'd make, and it's more with an income lens, is thinking about protection against drawdowns.

10:04Keith Balmer: Obviously, we're at a period right now where equity markets have certainly been very buoyant for the last few years. But let's not forget, you know, 10 % drawdowns occur in global equity markets pretty much every other year. 20 % drawdowns occur roughly every four to five years. So the ability to protect against those drawdowns, I think this is where income, you know, certainly offers something from an equity allocation perspective, we also think should be really important as well.

10:28James Burns: Keith, one of the things that's always amuse me when when i hear managers talking and they say they buy quality companies because the implication is that means somebody is deliberately trying to buy not quality companies but i i do now finally have more of an understanding of what they mean by that term of course and our listeners certainly do understand that um but really what i was what i was going to ask around that is given the rapid pace of technological change is there in your view such a thing as a quality company anymore. Everything can be disrupted or disintermediated, it feels like. Does quality exist?

11:04James Burns: Yeah, I think everyone's definition, to your point, everyone's definition of quality does change. I say inside the Universal Portfolios, we have that global manager that one of the focuses is on quality. And their definition, because they're systematic and quantitative, is very much data driven. So a lot of people talk about, when talking about quality companies to talk about moats. Moats are really hard to be very exact about exactly how big is your moat. And that's what we've seen in the software companies recently, that the software companies such as your SAPs of this world, great businesses, they thought they had a huge moat, but actually then AI has come along.

11:40James Burns: People like Claude, Claude Code has been able to effectively make coding sort of a commoditized product. You can code for free, which means to say, if your only moat that was there was effectively the code that you own, well, that moat has been diminished. It's been diminished very rapidly. I think it's probably been over diminished as we speak at the moment. There's been a little bit of a backlash on that one. But that more qualitative aspect is very difficult. If I go back to more the quantitative aspect, and so that more systematic approach, then you can look at things such as, so what makes a good quality company well low debt to equity um very little accruals on the balance sheet um the amount of debt they're also equity they're issuing into the marketplace all these sort of things um are definitions of good quality or high margins um so if you think about uh companies that would fall into those sort of categories from sort of the world here sort of minus one year sort of five years back you're sort of thinking uh your mag 7 would fall into that or certainly your hyperscalers of today would fall into that.

12:42James Burns: So maybe a sort of little subset or NVIDIA, great example, high margin product, low debt to equity. It's continuing business going through and actually it's bringing the qualitative aspect, a pretty decent moat around it. If you look at the others, Alphabet is now starting to issue equity as opposed to buy back equity. So therefore their definition of quality is starting to change or within the definition quality they're becoming a lower quality company even though their margins may be still good so actually i think what you're finding is that in recent times the companies that we would traditionally or recently traditionally have classified as quality are starting to move outside of that but others are moving in and so therefore there's still a definition of a high quality company but maybe you're playing in a different place than you were before thank you james from your point of view i don't know how central to your thinking sort of factors are when you're putting a portfolio together but if they are important or not um is is quality something that you that you think about and does it change and evolve i think so and as i say the starting

13:49Richard Saldanha: the market's still sort of fumbling its way around working out how ai is going to affect you know corporates going forward you know a big sell-off in the software companies in february actually they've regained that those losses now people have sat back re-evaluated and worked out actually AI could be a massive plus point for them. For us, you know, for the NPS that we run, as I said, we've got a blend of styles. We haven't necessarily got many quality growth managers in at the moment, but it's one of these areas we are looking at because, you know, managers of that style have had a pretty torrid few years.

14:26Richard Saldanha: And I think I've probably got a slight value bent to the way I like to invest. and it's always interesting seeing really good companies who have been around a long time which have got significant moats and have churned out pretty consistent earnings growth over the years but the market has got no interest in them at the minute and so that to me is interesting because at some point the music will change and these companies could actually have a pretty strong time. When there is, I don't know and we haven't made that change yet because there is no reason to believe that's going to change tomorrow.

15:05Richard Saldanha: But it's certainly something we are talking about on our desk and looking at.

15:09James Burns: Thank you. Richard, I guess, from looking at your fund, you're probably more at the quality end of the spectrum than some of the others. But what does that term mean anymore as an investor?

15:20Keith Balmer: Yeah, look, so I think the quality still persists, I think. I think what's interesting, obviously, we talked a bit about moats here. And I think obviously with the dawn of AI right now, Now, a lot of these moats, you know, structural moats that have endured for a long time are being challenged right now. So, I mean, you could think about, you know, data analytics businesses. You could think about, you know, even consulting IT services firms. I'm sure around this desk have asked the question, do you think Accenture is a quality company, you know, 10 years ago? I'm sure the answer probably would have been yes.

15:47Keith Balmer: And it traded at a premium to the market for that. Now, right now, it looks more like a, I'd argue, almost a deep value kind of, you know, it's trading on a single digit P right now. because, again, people are trying to factor in what potentially could AI disrupt this business model. And this is more of a terminal value debate with these software companies rather than necessarily what's going to happen over the next three years with the earnings and cash flows. So, look, I think with that in mind, you've got to be selective. And I think software is a really interesting point, right? Because obviously we saw a huge sell-off in February.

16:17Keith Balmer: And I'd argue it was a very indiscriminate sell-off when you look at it. So you had areas, I mean, I'll throw out cybersecurity as an example there. in many ways, when you think about the moats there in terms of the barriers to entry, how entrenched that is with their clients and customers. In our view, that sell-off just didn't sit right, frankly. So you had a lot of these cybersecurity stocks that frankly, baby was getting thrown out with the bathwater at that point. And we've seen since then the market reappraised that. So I think being selective, trying to understand what are the barriers to entry to the businesses?

16:47Keith Balmer: How entrenched are you? How proprietary are your data sets? I think you can find opportunities there right now within what we still think are quality companies. I think that's where investors need to be thinking. The other point just briefly to make here is also to think about the interest rate environment. Because if you think about quality companies, they had a very significant period of outperformance, right? As you think about how we obviously came out of the financial crisis, almost a zero interest rate environment that persisted, low rates persisted for a very long time. Since 2022, that dynamic has certainly changed.

17:16Keith Balmer: And that's obviously weighed heavily in a lot of these quality companies where clearly the duration of the cash flows and you discount that back at higher rates. And that's likely still to be a headwind if you think about where interest rates are right now as well. So also think about the rate dynamics as well.

17:30James Burns: Thank you, Richard. I'm glad you mentioned monetary policy. That is the next question. So you'll have to come up with new stuff now for this. but yeah James how relevant to your thinking about the direction of the equity market or the composition of future gains for equities is monetary policy I mean it's market expectations of monetary policy have swung everywhere we came into the year thinking cuts then at one point there were six rises priced in in the US now that's come back a bit but even in the last two days the market has begun to worry in the US about rate rises again. So the market's everywhere in terms of what happens, but the question is not what happens, but what could it mean for equities?

18:17Richard Saldanha: Yeah, I think monetary policy is one of our inputs we think about without necessarily being the most important. We've got three sort of proprietary signals that we look at in terms of the backdrop for equities. It's growth, inflation and policy. Interest rates feed into the policy signal. looking at fiscal conditions, availability of credit, and then central bank views. We've got Europe and Japan have most recently increased. We've got the UK and US who are unchanged. As you say, expectations have changed markedly, and we'll have to wait and see. So it's something that we're looking at. We do think the backdrop is still relatively positive.

19:04Richard Saldanha: But actually what's interesting, you may see that if you get a sharp move either way in rates in the US, that could actually be quite beneficial to different parts of the markets. If you've got interest rates coming down, probably better for the longer duration tech stuff again. But actually if rates stay where they were or even move higher, that may benefit some of the companies we've been talking about the last section, the quality ones, which actually would do far better in that environment. So I don't think it's as simple as saying monetary policy is good either way. It's much more nuanced.

19:38Richard Saldanha: And I think at the minute it's probably not as important as it might have been in previous years.

19:43James Burns: Keith, from your point of view, when there's more clarity on rates, how would that likely impact your thinking? Or how important would it be for your thinking on equity allocations? Yeah, I mean, like James, it's an input into the system because within the universal portfolios that we work in, they're multi-asset. So that obviously has features maybe a little bit more directly into the fixed income side, but it's not completely irrelevant for the equity side of the book either. If you think about what's been driving the US economy for the past, I mean, goodness knows how many, since post-pandemic, it's been high consumer confidence, high spending going out there.

20:22James Burns: and and if you think about one of the reasons behind that it's because interest rates effectively consumers are being felt flush as interest rates go up and uh fine funding and financing whether that's car finance or anything along those lines or being able to move um then that means to say that that's going to affect at a macro level uh the amount of confidence the amount of spending that's going to happen and so therefore the um the the sort of the the drive to um invest more take more risk. So monetary policy in terms of easing is definitively going to be overall a positive for equity markets.

21:01James Burns: So therefore, the corollary to that would be a rate rise should be a bit of a drag on performance. But I think, as James mentioned, Japan, Japan's been raising rates for a long time. If you look at the equity market in Japan and the performance of that, one can clearly argue that the opposite is also true. So what I think the actual, what this does do, you have to understand exactly which part of the economy it is going to change, what that means for each individual region. And if you now have a slight divergence in terms of monetary policy, you can start to think about it a little bit more in terms of regional opportunities.

21:36James Burns: So you can actually start to move your assets around a little bit easier than you could maybe if everyone's doing exactly the same thing at the same time. So you get differentiation at the moment. Richard, one of the things that I've found curious over the past year or so is that arguably those hyperscalers which have performed so well are long-duration assets. Long-duration assets should do badly when the market expects rate rises. But even when the market was pricing in rate rises a few months ago, those things continue to go up. So, you know, is the traditional rule about long duration equity, short duration equity, is that different?

22:17James Burns: Or would you expect the tech stocks to respond to higher rates in the way that I've just outlined? Or would it be different?

22:26Keith Balmer: No, you're absolutely right to make that point. And I'd say, you know, so far this year, equity markets in many ways have been pretty immune, let's be fair, to the dynamics that have been facing central banks and what we've seen in terms of, you know, rate expectations, right? And certainly for the fixed income market, that's been very different. There's almost been a dislocation between how equity markets have kind of been viewing this versus fixed income. And there's reasons for that. I mean, you bring the point about the hyperscalers. I guess if you think about what's really underpinning the kind of equity story, it's been earnings, right?

22:53Keith Balmer: And you look at the earnings growth, and that still remains structurally very strong when you look at it, double digit, well into excess at that, right? So you could argue even in an environment, inflation might be slightly higher. That earnings growth you're getting is offsetting that. But to be very clear, rates do matter for equity markets. Certainly when you look at it historically, they have done. So far this year, I mean, obviously we talked about the hike from the ECB, the Bank of Japan hiking, though, let's be fair, probably for slightly different reasons when you think about the reflationary impact.

23:18Keith Balmer: And obviously from a Japanese equity perspective, that was certainly digested pretty well when you think about it. But also you've got the likes of the Fed, right? And obviously you had Walsh's first meeting, you know, and certainly, you know, the dot plots certainly caused a bit of, you know, rupture in markets. And then obviously the talk of price stability there as well. well, we're now pricing in two hikes from the Fed over the next 12 months. So look, it's fair to say, you know, for central banks, it's still a pretty challenging environment to navigate, even with the prospect of a resolution to the war and all prices coming down from an inflationary perspective.

23:47Keith Balmer: So look, I think in that sense, certainly we look at historically, you know, when you have periods where central banks are in more of a tightening mode, that doesn't tend to be that supportive for equity markets. Now, does that mean earnings can still hold up pretty well? We think they can. But I think, you know, let's not forget, you know, rates certainly do matter from an equity market perspective, even if so far this year that hasn't necessarily been the case.

24:10James Burns: Just to add a little bit on top of that, I mean, what you've noticed is that when the direction of monetary policy has changed, then there's been a short, sharp move to reflect that. But actually, the market has looked through that. And I think it is coming back down to the underlying reason. What is the reason, the rationale behind what's going on in terms of that interest rate move? Is that going to affect earnings or not? If it's not affecting earnings at the moment, the market is very happy to ignore it and carry on as they were. If they are raising rates aggressively to, say, combat inflation, such as in 2022, it's a completely different story because you've moved from one regime to a completely different regime, and that's been too quick and too sharp for equity markets to be able to catch up on that.

24:48James Burns: So I think at the moment we're moving around in 25 basis points, plus or minus 50 basis points. And on the back of that, equity markets can digest it pretty well, concentrate on earnings, concentrate on the more fundamental side of the picture. And on that basis, there's not a lot changing at the moment. Richard, I'm besieged daily by UK equity managers, not to be drumack about it or anything, by UK equity managers wanting to talk about how cheap their market is. And it's wonderful. And it's the cheapest it's been for 40, 50, 100 years, whatever. They show me all sorts of wonderful graphs. But the FTSE has actually performed reasonably well.

25:23James Burns: To your mind as a global manager, is the FTSE actually a cheap market and an attractive market right now?

25:29Keith Balmer: Look, so to answer your question, yes, I still think it is a cheap market. I mean, look, there's lots of reasons why you can understand from an investment standpoint, people have been wary about the UK. You know, clearly fiscal challenges, political instability, what, seven prime ministers in the last decade. You've got obviously concerns from, I guess, from a stagflation perspective and relatively sluggish economy. But at the same time, you know, to your point about the FTSE, it's trading on 15 times earnings. the S &P is on 25 times. And we know there's some examples of global companies that are in the FTSE.

26:00Keith Balmer: I'll give you an example on the sort of consumer side Unilever for an example that it's a global business, in fact, more focused on emerging markets, but trades at a discount to its peers in the US. So I think the opportunities still exist from a UK perspective, certainly when we look at the FTSE. But also when you think about it from a mid-cap perspective, you've got the FTSE 250 now on 12 times earnings, right? And it's been very interesting. I mean, clearly, we've seen a lot of M &A activity this year. So, you know, you could pick out examples of takeover approaches for, you know, companies such as Tate & Lyle, you know, Schroder's, Beasley, recently EasyJet as well there.

26:33Keith Balmer: I think that's telling you that the valuations are cheap, frankly. The fact that you're getting the likes of private equity, foreign buyers clearly with a weaker pound as well, looking at it, stepping in and acquiring companies at a pretty significant premiums as well is telling you that UK companies are almost too cheap in some ways. But again, And from a global standpoint, you know, I think we do tend to focus more on those large cap names in the FTSE. And I still think it's still a fertile hunting ram for us.

26:57James Burns: James, the FTSE might be cheap, but is it cheap for a reason or is it attractively cheap?

27:03Richard Saldanha: I've had the same number of presentations as you have, and I buy into it. I mean, we have been overweight UK for some time. We did reduce into strength or the relative strength of the UK last year, but we remain overweight. and we've done our own work as well looking at the average of PE price to book and price to dividends and the UK is cheap compared to the world ex-UK and to Richard's point, you add Intertech to that list, 62 % premium and today, not that I know it, but Ramsden's a small pawnbroker and the UK is being bought out by a US peer and so it's across the spectrum and I think if you spoke to a small cap manager there's actually been a lot of small cap takeovers in the last 18 months that most have never heard of because they don't hit the papers in the same way.

27:53Richard Saldanha: But I think, as Richard said, that's the strategic and private equity buyers saying that if the market isn't going to recognize this value, we'll take advantage of that. So I think the UK market is cheap. And although it's maybe not as sexy as other markets today, there's a lot of value in offer. and these longer-term buyers are coming in and paying premiums, but probably in a longer-term view, actually not paying that much for these companies.

28:21James Burns: Thank you. And, Keith, what are your thoughts? Are you overweight UK in those universal funds that you've mentioned? No, not overweight. We're neutral. So in terms of valuation standpoint, you've got to understand that there are certain dynamics which will naturally mean it will trade on a lower multiple. So the US will always trade on a high or has historically trade on a high multiple than other regions anyway. So when you compare anything to America, it appears cheap as a starting point, really. But if you look at the composition of the UK market, it is very much sort of old school industry as opposed to tomorrow's technology, which is a bit of a shame.

29:01James Burns: We did have a couple of really good companies, but we sold them off nice and cheaply or they got bought nice and cheaply and are doing exceedingly well for other people. generally big US hyperscalers.

29:14James Burns: But it does play a role inside a portfolio. So as we've all talked about, it is cheap even when you adjust it for the market composition or the sector or composition that you have. If you want to bring more value bias into the portfolio to offset some of that growth bias that you're picking up from your technology companies, your more emerging markets, it's your more US markets coming through, then clearly it has a role to play. In a risk-off situation, it's going to do generally better than other areas. So it doesn't have to be front and centre to be the outperformer in the upward markets, but there's always a role for the UK market to play.

29:57James Burns: It would be great if we had more political stability. It would be great if we had better growth. It'd be great if we had better productivity. If we had those three things, And I think your 250 is looking very, very attractive at these sort of levels. But at the moment, we don't yet have that. And so therefore, I can't get overly excited. My animal spirits aren't going to overtake me on that one. If we look at the FTSE 100, obviously, it's done well out of defence, finance and energy because of the macro backdrop. Do we think that's going to continue to rally on from where we are at the moment?

30:29James Burns: Or do we think there's going to be a bit of a pullback, hopefully, if we get some sort of resolution in the Middle East? that might mean to say that actually that there's not a huge amount which is why we end up being sort of neutral to the UK in the middle so it still plays a role I just find it hard to get too excited about it well certainly some food for thought for advisors there but that is all we have time for with this episode but thank you for listening and thank you to our guests today Keith Palmer multi-asset investor at Columbia Threadneedle James Barnes head of the managed Portfolio Service at Evelyn Partners and Richard Saldana, Global Equity Fund Manager at Aviva Investors.

31:10James Burns: And thank you all for listening. Please do remember to tune in to future editions of the FT Advisor podcast released on Fridays at lunchtime. Thank you.

32:01James Burns: We'll be right back. July clearance now through July 6th at Wayfair.com. Wayfair, every style, every home. Is your cost of home insurance increasing?

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