Asset Allocation Update Weighing up the prospects for further rotation Although we do not expect US bond yields to keep on climbing sharply, we nonetheless think that the recent “rotation” in the US stock market has further to run, given the upbeat prospects for the... 12th March 2021 · 4 mins read
Asset Allocation Update Inflation & equities: how much is too much? Too much inflation can spell trouble for equities if it results in tighter real monetary policy or slower growth. But while we expect inflation to pick up in the US, we do not expect either of those... 10th March 2021 · 3 mins read
Asset Allocation Update More thoughts on US equities, bonds and growth In the US, this week’s slide in equities in the face of a renewed rise in real government bond yields might seem puzzling, given the rosy prospects for the economy. But the argument that the stock... 5th March 2021 · 3 mins read
Asset Allocation Update Are REITs more at risk than equities from rising yields? We doubt that Treasury yields will continue to climb rapidly. However, that would be another reason to expect the returns from US REITs to fall short of those from ordinary US equities over the next... 25th February 2021 · 3 mins read
Asset Allocation Update Real yields, economic growth and the US stock market Although we forecast a further small rise in the 10-year Treasury yield this year, we doubt that this will upend the US stock market. 25th February 2021 · 3 mins read
Commodities Update We expect commodities to underperform US equities Although we expect oil prices to rise a bit further this year, we doubt that we are in the early phase of a new “super cycle” in commodities. In fact, we project that the returns from commodities will... 19th February 2021 · 4 mins read
Asset Allocation Update Toning down our optimism on US REITs While we still expect US Real Estate Investment Trusts (REITs) overall to fare reasonably well over the next couple of years, we no longer anticipate that they will outperform the US stock market. 5th February 2021 · 4 mins read
Asset Allocation Update What corporate bonds tell us about equity valuation The relative valuation of the US stock and corporate bond markets is another piece of evidence against the idea that equities in general are currently in a bubble. Their relative valuation today... 22nd January 2021 · 2 mins read
Asset Allocation Update Even less evidence of equity bubbles outside the US While we doubt that the US stock market’s current valuation will prevent it from making further gains, the fact that valuations are much lower in other parts of the world suggests to us that equities... 15th January 2021 · 5 mins read
Asset Allocation Update Even if there is a bubble, it may not burst any time soon We don’t think that there is a bubble in the US stock market. Yet even if we are wrong, it may inflate further before bursting given the outlook for the economy and monetary policy. 14th January 2021 · 4 mins read
Asset Allocation Update 2021 could be a better year for UK equities We anticipate that UK mid- and large-cap equities will fare much better in 2021 than they have in 2020, provided vaccines prove effective in winning the battle against COVID-19. 23rd December 2020 · 4 mins read
Asset Allocation Update We do not think that most risky assets are overvalued We disagree with the idea that the valuations of most “risky” assets have risen to unsustainably high levels. In fact, we think that the valuation of the US stock market could have scope to rise a... 17th December 2020 · 5 mins read
Asset Allocation Update Q may be exaggerating US equity market overvaluation Although the level of “Equity Q” for the US non-financial corporate sector has risen to a record high, we are wary of concluding that the stock market is in an unprecedented bubble that is bound to... 11th December 2020 · 4 mins read
Asset Allocation Update The reversal of relative fortunes within EM equities We think that the outperformance of equities in EM EMEA and Latin America relative to those in EM Asia in November is a sign of things to come, as the world recovers from COVID-19. 30th November 2020 · 4 mins read
Asset Allocation Update A fresh look at the relative performance of US equities We anticipate that MSCI’s benchmark index of mid- and large-cap equities in the US will underperform its index of those in other developed markets, as investors continue to focus more on the roll-out... 25th November 2020 · 4 mins read
Asset Allocation Update Low Treasury yields may help US REITs to outperform US equity real estate investment trusts (REITs) have underperformed ordinary US equities considerably in 2020 despite a plunge in US Treasury yields, which usually provides more of a boost to the... 20th November 2020 · 2 mins read
