Although the valuation of the MSCI UK Index has become even more attractive compared to those of the MSCI USA Index and MSCI EMU Index since the outbreak of COVID-19, this is partly due to its sector composition. Even so, we remain of the view that it will outperform them as the rotation trade resumes.
In this Update, we take a look at the valuations of a broad range of the “risky” assets that we cover on our Asset Allocation service. We think that six key points stand out.
Some of the policy proposals set out by the Biden administration in recent weeks add weight to our view that the S&P 500 will rise more slowly than US nominal GDP in the coming years – in contrast to the pattern of the last decade and much of the period since the 1980s.