To neutral and beyond
Central bank watch: The global hiking cycle is in full swing. In our analysis, we expect all central banks, except the Bank of Japan (BoJ) and the People’s Bank of China (PBoC), to remain formidable hawks until at least early
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EMEA-Listed ETF Flash Flows
ETFs posted net inflows of $1.2bn last week. Fixed Income ETFs captured $744mn, while Equity gathered smaller net inflows …
Global Fixed Income Update – October 2022
Growth is slowing but not collapsing. Elevated inflation is squeezing household incomes, confidence and spending, leading to a slowdown in economic activity as illustrated in Figure 1. Recently, weaker activity has been registered in both the manufacturing and service sectors,
Anywhere to Hide?
Global Asset Allocation: The View From Europe: Hopes for a continuation of the summer rally off the June lows were dashed in the back half of the third quarter. The inflection lower in risk assets coincided with Fed Chairman Jerome
Quick take: Britannia unhinged
Liz Truss’s defenestration last week exposed deep divisions over economic policy within the UK government and Conservative party. In winning the general election in 2019, Boris Johnson concealed these divisions by promising both higher public spending to his new voters
Do public equities have a role to play in impact investing?
Impact Investing In terms of asset class, impact investing has traditionally been associated with private capital. Public equities make up just 17% of the USD 502 billion in assets managed in impact strategies1 , a negligible amount compared with the
Are consumers really trading down to private label foods yet?
Since at least February, with the start of Russia-Ukraine War, many investors and sell-side analysts have sounded the alarm that private label was positioned to gain meaningful market share at the expense of branded food. There was certainly a logic
Podcast: Corporate Green Bonds: fostering a net-zero emissions economy and protecting the environment
Green bonds enable capital-raising and investment in projects that foster a net-zero emissions economy and protect the environment. Green bonds can cover a variety of projects, such as renewable energy, energy efficiency, green buildings, clean transportation, a circular economy, and
Equity investing in an inflationary environment
After a long hiatus, the resurgence of inflation has become a key concern for investors over the past year. Central banks are moving towards a tighter monetary stance as they seek to tame long-term inflation expectations. With falling real incomes
Clean energy invetments: a new addition to the investors’ inflation toolkit?
While investors have typically looked to commodities as an inflation hedge, a lack of income, coupled with volatile prices, has resulted in low risk-adjusted returns. Can direct energy investments help investors guard against rising prices? Clean energy: protecting investors against
A Green Future For Steel
Steel is a crucial input for multiple key sectors such as construction, renewable energy production and transport and is a fundamental element of a successful economic transition to net zero. The 2015 United Nations Framework Convention on Climate Change (UNFCCC)
The Federal Reserve will stay hawkish — what will that mean for markets?
Stocks and bonds have pulled back since the Fed clarified its commitment to fighting inflation. Despite volatility, we believe equities will stay within a broad trading range and not retest earlier lows. Rising yields, particularly among spread assets, should make
Fast Filtering with Large Option Panels: Implications for Asset Pricing
The cross-section of options holds great promise for identifying return distributions and risk premia, but estimating dynamic option valuation models with latent state variables is challenging when using large option panels. We propose a particle MCMC framework with a novel
Real-Time Macro Information and Bond Return Predictability: A Weighted Group Deep Learning Approach
This paper proposes a weighted group neural network model and reexamines whether treasury bond returns are predictable when real-time, instead of fully-revised, macro information is used. Real-time macro vintage data and news-based topic attention are taken into account. We find
The State of the U.S. Retail Investor: Insights & Implications
U.S. retail investors’ heightened market activity and engagement has been fascinating to watch over recent years. There has been a number of factors which have had a profound impact on the retail investor segment, including the pandemic, technological advancement in
Quarterly Outlook Q4 2022
There was no shortage of fear in the global bond markets in the third quarter. Central banks aggressively pushed short rates higher in response to the worst inflation of the last half …
We need to talk about yields
Schroders CIO Lens: At the beginning of the summer, I asked the question “are we there yet?”, in relation to whether it was time to start thinking about taking on more investment risk. The answer then was no. At that
De rol van Pictet Asset Management bij de aanpak van biodiversiteitsverlies
Het verlies aan biodiversiteit vormt een minstens even grote bedreiging voor de leefbaarheid van de aarde als klimaatverandering. De aanpak van de biodiversiteit is echter nog uitdagender dan de aanpak van klimaatverandering. Bij klimaatverandering draait alles om slechts één variabele,
Attractive opportunities remain across four key credit markets
It has been a challenging year for fixed income markets in 2022 amid rising inflation and slowing global growth. While uncertainty is likely to remain elevated, today’s starting yields offer an attractive entry point for long-term investors. Yields across sectors
Policy Pressure
Amid sticky inflation, central banks are continuing to maintain a hawkish stance with higher peak interest rates anticipated compared to last month. Nonetheless …
Collaborating to boost engagement impact
Active Ownership Report 2020: Welcome to our second annual Active Ownership Report, in which we report on our activities globally for the first time. The objective of this report is to inform our clients and other stakeholders of our stewardship
Into the unknown
Q4 2022 Investment Outlook: The global economy is facing a confluence of shocks, most recently the severe reaction in UK assets and FX to the new fiscal package (roughly 10% of GDP, unfunded). Market confidence has continued to slide on
Cyclical Outlook: Prevailing Under Pressure
Our baseline cyclical forecast includes shallow recessions and rising unemployment across large developed markets, with growth unlikely to bounce back quickly. Central bankers appear squarely focused on …
Equity Market Outlook 4Q 2022
Economic and Market Review: Key Considerations for Equity Investors The outlook we laid out last quarter remains unchanged, and yet the debate about whether we are in a bull or bear market has been as volatile as the market itself.
Investing in volatile times
The investment lexicon is currently dominated by inflation and recession. But what could these terms – so readily used by investors and their advisors – actually …
Fixed income markets: when short term pain can bring long term gains
2022 has not been a great time for bonds. Year-to-date, the Bloomberg Global Aggregate Index and Bloomberg US Treasury Index returned-20% and -13%, respectively. 1 Meanwhile, risky asset classesalso sold off significantly, which has …
Strategic Sector Selector
In the third quarter of 2022, global equities resumed their slide with no end in sight after a brief period of hope during the summer. Waiting for a recovery at the moment feels like waiting for Godot. Global central banks
Betere manieren om de wereld te voeden
Voedselzekerheid is door de Oekraïnecrisis een nog urgenter wereldwijd probleem geworden. Beleggers kunnen helpen om oplossingen te bedenken – van boer tot bord. De forse stijging van de voedselprijzen en de bevoorradingsproblemen, die nog verergerd werden door de Russische invasie
Attractive valuation, but selectivity is required
Flash Update: The recent round of positive performances in local currency markets has offered investors hope of some recovery after the asset class dropped by 16% between mid-February and mid-May 2022. Rising yield levels have contributed the most to the
Contained EM inflation and higher real yields suggest relative value in local markets
The recent surge in commodity prices has amplified the acceleration in inflation that we have been seeing globally, arising from disruption to global supply chains caused by the pandemic. Expectations just a few months ago were that the drivers …
De obligatiemarkten en de moeilijke evenwichtsoefening van de beleidsmakers
Het risico op stagflatie maakt het leven van overheden en centrale banken veel moeilijker en het toegenomen risico op beleidsfouten zal de volatiliteit op de obligatiemarkten waarschijnlijk hoog houden. Maar er ontstaan ook beleggingskansen. Het VK ligt de laatste tijd
Tug of war: bitcoin economics vs. Macroeconomics
Bitcoin’s on-chain activity suggests that holding behavior and network fundamentals are much stronger than its current price would suggest. Ethereum’s successful transition to proof-of-stake marks a monumental accomplishment for its ecosystem. An uncertain macro environment continues to weigh heavily on
EMEA-Listed ETF Flash Flows
ETFs saw net outflows of $199mn last week, driven by Commodity, which lost $509mn. Equity and Fixed Income both enjoyed relatively muted net inflows of $114mn and $108mn, respectively.
Impact of the rise in commodity prices on EM equities
A further rise in commodity prices is a key channel through which the conflict in Russia/Ukraine might affect the rest of EM. If the commodity price increase is sustained, some EM countries may suffer from a deterioration in the terms
Flash update: UBAM – Positive Impact Equity
Impact investing has been challenging in Europe in 2022 Interestingly, a large contributor to the underperformance compared with its benchmark comes from what PIE does not own, rather than what it does. There are some striking observations to make: first,
Where do we find value in Emerging Market equities?
Emerging market equity returns have been resilient year-to-date in the face of increasing uncertainty over the global economy and rising interest rates. The region remains our preferred choice in our model asset allocation, especially if inflation peaks, which we expect
Global House View – Q4 2022
The year 2022 seems to have caused a regime shift in financial markets. In previous years, the assumption largely was that the world had more a deflationary issue due to aging, globalization and lack of bargaining power of labor. However
Quick take: running the rule over Truss and Kwarteng’s fiscal radicalism
Recent weeks have seen major changes in UK economic policy with the arrival of Liz Truss as Prime Minister and Kwasi Kwarteng as chancellor, sparking major controversy and a selloff across gilts and sterling. Taking a step back, it is
EMEA-Listed ETF Flash Flows
Weekly as of 7 October 2022: ETFs posted net inflows of $1.4bn last week. Fixed Income captured $1.2bn, while Equity enjoyed $332mn of …
Seeking reasons to buy US equities
After a 24% year-to-date decline in the S&P 500, we ask what could make us turn positive on equities. A 30% further decline would help but short of that, some combination of the start of recession, VIX above 40 and
Barometer: Aandelen blijven onaantrekkelijk, maar obligaties verdienen meer aandacht
Aangezien de donkere wolken boven de economie nog niet zijn verdwenen, zullen aandelen wellicht verder dalen. Obligaties beginnen er echter aantrekkelijk uit te zien.
New Market Regime Favours Alternatives
2021 appears to have been the turning point for a 30-year period of disinflationary global trends which led to elevated asset prices and suppressed volatility. Going forward, financial assets will need to reprice, but at levels that are unpredictable. What
Fall 2022 Real Estate Outlook
The economy was mixed over the summer with GDP contracting for a second consecutive quarter while labor markets continued to exhibit strong growth. The risks that we outlined in our Spring 2022 Outlook have become more acute, in our view,
Global outlook: all eyes on where US inflation lands
In this paper, currency analyst Jens Søndergaard answers key questions on the outlook for the global economy, covering the Russia/Ukraine conflict, inflation and currency views. How has the Russia/Ukraine conflict impacted your global macro-outlook? So much of the macro-outlook in
Research note
Managers of private market mandates seem generally unprepared to support clients looking to assess climate related risks and report in line with the requirements of the Task Force on Climate-related Financial Disclosures (TCFD). Data availability is particularly poor within private
Could emerging markets be more vulnerable to rising food costs?
Introduction The subject of inflation has been seemingly omnipresent over the past two years as the global economy moved beyond the initial shock of a global economic shutdown into a world of supply disruptions and pent-up consumer demand. Initial conjecture
Global listed infrastructure
Driving energy transition A global pandemic, multi-billion-dollar infrastructure investment plans, rising inflation, green stimulus, and a focus on decarbonisation have seen the demand for infrastructure investments rise exponentially. While most investors immediately look to unlisted offerings, we believe they should
Recession risk – the point of recognition approaches
Monthly investment outlook august 2022 Just as markets had to reprice a new interest rate regime in early-2022 amidst fading hopes for a transitory inflationary backdrop, they are now similarly beginning to recognise that the prospects of an economic soft
Inzichten van Thematic Advisory Boards
De thematische aandelenbeheerders van Pictet kunnen een beroep doen op de expertise van Thematic Advisory Boards om een gedifferentieerd perspectief te krijgen op de belangrijkste vragen over de thema's. Op zoek naar een voorsprong in informatie Toegang krijgen tot uiteenlopende
The evergreen appeal of high yield bonds
High yield bonds are frequently misunderstood, with an undeserved reputation for being high risk. We view them as a hybrid asset class, sitting between equity and traditional debt markets. In our view, high yield bonds exhibit compelling …
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