Asset Allocation Update Our outlook for fx-hedged returns in 2022 When it comes to developed markets (DMs), we suspect that fx-hedged returns will be significantly better than unhedged returns for US dollar-based investors in foreign-currency-denominated assets. 17th January 2022 · 2 mins read
Global Markets Update Key financial market calls for 2022 We do not think the returns from many financial assets will be as good in 2022 as they were in 2021. For a start, we envisage a sell-off in government bonds in most places, reflecting the outlook for... 13th January 2022 · 4 mins read
Asset Allocation Update EM equities may continue to underperform in 2022-23 We think that emerging market (EM) equities will continue to underperform their developed market (DM) peers over the next couple of years, even if that underperformance is far less stark than it was... 13th January 2022 · 5 mins read
Asset Allocation Update Case for US equity underperformance is looking strong Although mid- and large-cap equities have fared better in the US than the rest of the developed world in most years since the Global Financial Crisis (GFC), we think the chances of it happening in... 10th January 2022 · 5 mins read
Asset Allocation Update Revisiting our forecasts in light of the Fed After taking on board the Federal Reserve’s recent hawkish pivot, we now forecast that the central bank will raise its policy rate much more quickly than we had previously anticipated. This Update... 17th December 2021 · 3 mins read
Asset Allocation Update US REITs may outperform ordinary US equities The recent resilience of US real estate investment trusts (REITs) seems to reflect both easing concerns about the Omicron variant and a net decline in long-dated Treasury yields. Although we expect... 13th December 2021 · 4 mins read
Asset Allocation Update Is US households’ voracious appetite for equities sated? US households and nonprofit organizations (NPO) lost their appetite for equities last quarter. If they don’t get it back, it may not augur well for the stock market. 10th December 2021 · 3 mins read
Asset Allocation Update Taking stock of potential corporate tax reforms This Update answers several questions on the Biden administration’s latest proposals for US corporate taxes as well as the global tax deal recently agreed among the world’s major economies. The... 19th November 2021 · 8 mins read
Asset Allocation Update Why we still aren’t convinced the S&P 500 is in a bubble Even though the S&P 500 has risen by almost another 25% or so this year, we are still not persuaded that the US stock market is in a bubble that is about to burst. 12th November 2021 · 4 mins read
Asset Allocation Update We expect LatAm equities to trail those in EM EMEA We think that MSCI’s Emerging Markets (EM) Latin America Index will continue to underperform its EM EMEA Index over the next couple of years, albeit not to the same extent as it has in 2021 so far. 12th November 2021 · 5 mins read
Asset Allocation Update Reading the runes of relative valuation within the US stock market One reason to think that the performance of the US stock market will underwhelm, at least in the long run, is that some of the gaps between the valuations of its most highly and lowly valued companies... 4th November 2021 · 3 mins read
Asset Allocation Update Correlation between US equities & Treasuries not set in stone While many observers seem to have been surprised by last month’s joint sell-off in US equities and Treasuries, there is no reason in principle why the two assets should be negatively correlated. It... 11th October 2021 · 4 mins read
Asset Allocation Update Infrastructure & reconciliation unlikely to mean Q1 rerun While the large fiscal stimulus passed in the US in the first quarter of this year appears to have been a key reason why equities there outperformed Treasuries at the time, we think that the... 6th October 2021 · 5 mins read
Asset Allocation Update Revisiting the relative valuations of US equities and bonds Although the pull-back in the S&P 500 last month was probably influenced by a sell-off in Treasuries (see here), we don’t subscribe to the view that stocks are in a big bubble that bonds are bound to... 1st October 2021 · 3 mins read
Asset Allocation Update Putting risky asset valuations into context This Update compares the valuations of the twelve different “risky” asset classes that we cover on our Asset Allocation service, both relative to one another and to the yields of “safe” assets, as... 13th September 2021 · 5 mins read
Asset Allocation Update EM assets & the risk of higher inflation We think that there is a risk of a period of moderately higher inflation in some major emerging markets (EMs) over the coming years. If that came to pass, it would probably be bad news for local... 3rd September 2021 · 4 mins read