The Lemon Fool

Defensive Seneca cuts shares for gold and warns of 2020 slump

Defensive investors Seneca Investment Managers have further slashed their exposure to shares and taken new positions in perceived safe haven gold funds to prepare for a ‘global slump’ starting next year.

For over two years, the value-tilted fund group has been cutting its exposure to equities as it believes markets are near the end of the investment cycle.

Peter Elston, chief investment officer at the group, said evidence was mounting that the global economy was ‘approaching a downturn’ despite worries easing over recent months on the back of a more dovish tone from the US Federal Reserve and hopes that quantitative tightening from central banks will be put on the back burner.

However, Elston is maintaining that investors need to gradually prepare for a ‘global slump’ that he believes will start ‘around the beginning of the next decade’ and has moved increasingly underweight in equities since the third quarter of 2017.