Asset Allocation Update Valuations may limit the outperformance of Indian equities We think the stretched valuations of Indian equities compared to those elsewhere will prevent the standout performance of Indian equities seen so far in 2022 being sustained over the longer run. China... 28th November 2022 · 4 mins read
Asset Allocation Update US equities, bonds and earnings recessions We doubt the recent outperformance of equities vis-à-vis government bonds in the US will persist over the next three to six months, given our view that the economy there is heading for a mild... 25th November 2022 · 5 mins read
Asset Allocation Update We think euro-zone equities have further to fall Our downbeat economic forecasts for the euro-zone underpin our view that equity markets there will fall further in the coming months. Within the region, we think the downside risks for equity prices... 18th November 2022 · 4 mins read
Asset Allocation Update Long-run US equity relative performance and the US dollar We suspect the underperformance of US equities that has accompanied the US dollar’s slump so far this month will become a feature from mid-2023, as the currency eventually comes under sustained... 16th November 2022 · 3 mins read
Asset Allocation Update Is China’s stock market relatively appealing? The news that the authorities in China plan to “optimise” their response to the pandemic while not abandoning their zero-COVID policy has coincided with a surge in its stock market. There is still a... 11th November 2022 · 6 mins read
Asset Allocation Update UK HY corporate bonds may not stay bottom of the class We doubt the recent underperformance of UK high-yield corporate bonds relative to those in the euro-zone will continue given the relative outlooks for monetary policy and economic growth. 10th November 2022 · 4 mins read
Global Markets Update Tougher times may lie ahead for Brazil’s markets Brazil’s financial markets have been some of the world’s best performers lately, supported in part by the prospect of centrist policymaking by incoming president Lula. With the presidential election... 8th November 2022 · 4 mins read
Global Markets Update Market strains create new dilemmas for central banks As the recent breakdown of the UK Gilt market illustrates, policymakers face an increasingly difficult trade-off between combating inflation, supporting economic growth and maintaining financial... 26th October 2022 · 10 mins read
Asset Allocation Update Unpacking the fall in the valuation of the UK stock market Despite stabilising a bit recently, the valuation of UK mid- and large-cap equities in general has fallen recently in both absolute terms and relative to comparable indices elsewhere. While that doesn... 25th October 2022 · 4 mins read
Long Run Update We expect mediocre long-run returns from Chinese equities Although relatively low equity valuations sometimes point to a greater chance of outsized returns over longer time horizons, we do not think that this is the case for China’s stock market. After all... 20th October 2022 · 5 mins read
Asset Allocation Update High FX-hedged Gilt yields may be short-lived The spread between the 10-year Gilt yield hedged in US dollar terms and the 10-year Treasury yield has widened dramatically of late. But given our forecasts for short-term interest rates in the UK and... 14th October 2022 · 4 mins read
Asset Allocation Update What to make of gold’s resistance to the surge in TIPS yields We suspect that the reduced liquidity of inflation-protected Treasuries vis-à-vis their conventional counterparts is one reason why the price of gold has not fallen as much as might have been expected... 14th October 2022 · 5 mins read
Asset Allocation Update Sector allocation as the economic outlook darkens We think that traditional “defensive” sectors of the US stock market – consumer staples, health care and utilities – will continue to hold up better than “tech-orientated” sectors – information... 12th October 2022 · 6 mins read
Global Economics Update From inflation crisis to financial crisis? Problems at California-based lender Silicon Valley Bank (SVB) have refocussed attention on financial sector risks. In light of this, we are resending a report from last October that provides a... 11th October 2022 · 5 mins read
Asset Allocation Update We don’t expect the relative rout in US REITs to persist Although we think that US equity REITs may have further to fall, we don’t expect them to continue to underperform the broader US stock market. The key reason is that we don’t expect Treasury yields to... 7th October 2022 · 5 mins read
Asset Allocation Update US equities aren’t bound to recover if Treasuries do We think the US stock market will fall further even after Treasury yields drop back, as the equity risk premium rises and expectations for earnings are downgraded amid a deteriorating economic... 7th October 2022 · 3 mins read
