Asset Allocation Update Valuations could work in favour of US equity REITs The relatively low valuations of US equity REITs influence our view that they will outperform ordinary US equities over the next two years or so, provided that COVID-19 is contained. 11th November 2020 · 3 mins read
Asset Allocation Update Bonds and equities post US elections: 2016 vs. 2020 While there could still be more twists and turns to come after this week’s elections in the US, in general we expect equities there to outperform Treasuries between voting day and the end of 2022. 6th November 2020 · 4 mins read
Asset Allocation Update Uncertain election outcome leaves markets in limbo While the final results are yet to be determined, whoever wins the US presidency probably faces continued gridlock in Congress. That may explain why the moves in markets overall so far have been... 4th November 2020 · 4 mins read
Asset Allocation Update Weighing up the relative prospects for energy & metals We think that energy commodities will claw back a bit of the ground that they have lost relative to industrial metals over the next two years or so, as some cyclical factors linked to COVID-19 which... 3rd November 2020 · 4 mins read
Asset Allocation Update How would TIPS fare if US inflation surged? We expect TIPS to continue to perform quite well, and better than conventional Treasuries, in the next few years. But we see a risk of higher inflation thereafter. That would, however, probably only... 28th October 2020 · 5 mins read
Asset Allocation Update We expect EM equity outperformance in Asia to end We think that MSCI’s indices of emerging market equities in Latin America and EMEA will reverse some of their recent underperformance relative to the MSCI EM Asia index over the next few years, just... 26th October 2020 · 4 mins read
Asset Allocation Update Potential implications of an Operation Buy and Twist A renewed rise in Treasury yields in response to growing expectations of a large US post-election fiscal stimulus would test the Fed’s resolve to keep monetary conditions extremely loose. We suspect... 15th October 2020 · 5 mins read
Asset Allocation Update Assessing the implications of rising Treasury yields Our current views of many assets and the US dollar are influenced by our forecast that the yields of conventional Treasuries will remain firmly anchored, even as expected inflation increases. We are... 7th October 2020 · 3 mins read
Asset Allocation Update Equities, commodities, and the risk of higher inflation The fallout from COVID-19 will probably keep inflation subdued in the near term. But there is a risk of significantly higher inflation further ahead if earlier policy stimulus starts to push prices up... 28th September 2020 · 3 mins read
Asset Allocation Update Assessing the risks posed by the Fed’s largesse We are not convinced the Fed is sowing the seeds of the next crisis by pursuing very easy monetary policy, even if this contributes to higher asset prices. Instead, history suggests the main factors... 24th September 2020 · 4 mins read
Asset Allocation Update Real yields and the $ unlikely to be the 1980s redux Although we think a further shift in real yields in the US vis-à-vis other major economies will keep the dollar under pressure, we expect the overall move to be far smaller than those of the 1980s... 4th September 2020 · 4 mins read
Asset Allocation Update Short-term gain but long-term pain for energy stocks? We suspect that some of the recent underperformance of energy stocks will unwind over the next few years if, as we forecast, the prices of energy commodities grind higher. Nevertheless, we think that... 1st September 2020 · 4 mins read
Asset Allocation Update Sector performance in the next phase of coronavirus We expect some sectors of the stock market that have underperformed in coronavirus to make up ground on those that have outperformed, assuming the virus is brought under control. A notable exception... 26th August 2020 · 4 mins read
Asset Allocation Update Stocks likely to beat bonds regardless of election result Political uncertainty often seems to have weighed on the performance of US equities, both in absolute terms and relative to Treasuries, before a presidential election. But another lesson from history... 20th August 2020 · 4 mins read
Asset Allocation Update The possible winners and losers from Biden’s tax plans While Joe Biden has said that he would clamp down on the US companies, particularly in the technology, pharmaceutical and biotech industries, who book much of their earnings in tax havens, we think... 12th August 2020 · 6 mins read
Asset Allocation Update How COVID-19 may affect US vs. European equities It may seem surprising that the MSCI USA Index has broadly kept up with the MSCI Europe Index in common-currency terms since 8th June, given the simultaneous surge in cases of COVID-19 in the US while... 20th July 2020 · 4 mins read
