The report emphasizes the appeal of emerging markets over developed ones, citing the high valuation of the U.S. market as a reason for closing the gap with other developed regions. The author also highlights the attractiveness of fixed-income assets, as
LONG-TERM STRATEGIC OUTLOOK A five-year returns forecast for major asset classes — updated twice a year to help you set strategic portfolio allocations The strategic outlook for major asset classes over the next five years is marked by uncertainty, with
Tactical Asset Allocation Outlook ■ Many of our equity signals note an improving environment, but we continue to closely monitor the extent to which an economic slowdown is priced into earnings. ■ We maintain our overweight view on fixed income. While
De oorlog in Oekraïne, het toenemende conflict tussen de VS en China, klimaatverandering en COVID-19 zorgen voor geopolitieke turbulentie, fragmentatie, en grote economische onzekerheid. In deze Marktvisie bekijken wij vanuit meerdere invalshoeken op welke manier beleggers kunnen omgaan met deze
Economische ontwikkelingen: ◼ Groeiverwachtingen krabbelen op, met name in Europa ◼ Inflatie daalt verder ◼ Forse daling kortlopende …
KEY POINTS: Forecasted high-yield default rates are up slightly since our April 2022 assessment. A deteriorating macroeconomic outlook and geopolitical risks are driving the forecast. Default rates remain well below long-term default rates.
Impact investing originated in philanthropy and started from a need to close a funding gap in private markets. This to a certain extent explains why the traditional purist definition of impact investing remains constrained to certain asset classes. The landscape
Beleggingsnota 2023 De trefwoorden vorig jaar in de Beleggingsnota 2022 waren: COVID-19, productieverstoringen, en “peak growth”. De inflatie begon al te stijgen, maar was nog relatief beperkt (2,2% in de eurozone en 5,4% in de VS), en werd voornamelijk als
Key insights: The conflict in Ukraine underscores the tension of balancing energy transition goals and energy needs. The war is not compromising Europe’s commitment to decarbonization, but the short-term focus is on energy independence and security of supply. Because Russia
While the word inflation again dominated markets over Q4 2021, a new word rivalled it by December: Omicron. This Covid-19 mutation was identified by South African scientists and soon it was spreading fast. The world flew into a panic, banning
Historical perspective to understand future expectations of return In their 2015 paper, “Occam’s Razor Redux: Establishing Reasonable Expectations for Financial Market Returns,”1 authors John C. Bogle and Michael W. Nolan describe a simple model for developing capital market expectations, looking
When market volatility spikes, investors question what, if anything, they should do. Markets reacted strongly to news that Russia invaded neighboring Ukraine. The world has been watching tensions in the region escalate since the beginning of the year. Russia objects
2022 will be a new year in more ways than one. After more than a decade of monetary stimulus, the US Federal Reserve has signaled that it will raise interest rates and reduce support for the economy and asset prices.
Three hikes in 2022? At its December meeting, the US Federal Reserve left policy rates unchanged, near zero, while signaling a willingness to hike as many as three times in 2022 to combat inflation. It also announced an acceleration in
After the shock Covid-19 recession of 2020, global economic growth bounced back in 2021. Earnings soared more than was forecast, and the prospect of monetary tightening emerged with inflation proving less transitory than hoped. Taking the Covid period in its
Macro / government bonds All three major central banks making decisions last week have demonstrated that they no longer regard the downside risks to economic activity over the coming months as outweighing the need to address inflation pressure.
In 2022 we expect the market narrative to transition to the traditional expansionary phase of the business cycle. Here’s what it means for fixed income investors. Monetary headwinds Throughout 2021 the invisible hand of easy global monetary policy supported financial
Inflation and supply chain headwinds are expected to ease as the year progresses. And reopening trade will present select opportunities. As economies transition to recovery from the onset of the pandemic, there will be changes and challenges. Without accommodative monetary
The Infrastructure Investment and Jobs Act is one of several positive drivers for municipal bonds in the new year. After months of debate, Congress passed the $1.2 trillion Infrastructure Investment and Jobs Act (“IIJA”), which was signed by President Biden
Hydrogen is the most abundant molecule in the universe, found primarily locked in water and hydrocarbons. Its qualities have been known for a long time, and it has been used for more than 100 years as an industrial chemical. While
I wonder if anyone at the start of the year would have predicted that US inflation would have risen to 6.8% y/y in November? If we had expected this, you would have thought that bond yields would have traded at
We entered 2021 with the prospect of new vaccines taming Covid-19 and that effort proved transformative in developed markets. The coronavirus persists, however, and its impact will continue to be felt in 2022 as the pandemic plays out. New therapies
2021 was a standout year for UK real estate, which delivered annualised total returns of 14.7% to the end of October, as robust income returns were complemented by the return of capital growth. This represents the highest level of annualised
2021 was a year of booming markets which were in danger of overheating before the Omicron Covid-19 variant came along. A profit boom on both sides of the Atlantic has supported equity markets, with the US looking exceptionally strong in
The third quarter is normally a quieter period following the main corporate Annual General Meeting season and, this year, being the final run-up to the COP26 conference in Glasgow. With COP26 a key milestone for the global climate response, climate
We’re now seeing the economic consequences of shutting down the world and then hitting the restart button. As most economies re-open, demand for goods and services has largely recovered to pre-Covid levels, however supply chains have remained under stress. What
Interest rates have been historically low for more than a decade, dampened by the flood of monetary stimulus introduced in the wake of the global financial crisis. In 2022 we expect this to change. As we move towards economic recovery
Core government bond yields were lower and yield curves flatter last week (see chart of the week). More hawkish rhetoric from the recently reappointed Chair of the US Federal Reserve has upset the short end of markets, forcing yields higher.
If you are looking for market volatility to spice up your week then core government bond markets would be a good place to start. After last weeks ‘communication breakdown’ between central banks and investors, and more dovish policy response, that
Market updates: The week saw an increase of cases of the newly identified Omicron variant of Covid-19 observed in South Africa and elsewhere. Though the week cases have been seen across Europe, Asia and in the US, causing fears of
Reaching a net-zero emissions energy system represents a radical transformation of the economy from one dominated by fossil fuels to one that is predominately based on clean energy. This will require radical decarbonisation across all sectors of the economy. As
Core government bond markets were a little calmer last week with yields a shade lower. This week should be relatively quiet as the US celebrates Thanksgiving on Thursday. We also expect the US President to announce if Jay Powell will
European Gazette: As central banks move gingerly towards normalising monetary policy, a delicate balancing act is under way. They need to tighten policy – but neither too soon, nor too quickly. Indeed, the flattening of the US yield curve in
Market updates: At the start of the week, President Biden signed into law the $1.2 trillion infrastructure package. He is also set to announce a new US Federal Reserve Chief, which is expected to be either incumbent Jerome Powell or
Two factors have interested us in Europe in 2021. First, there has been a value rally since November 2020, particularly in smaller companies. The onset of the pandemic in Europe in early 2020 initially saw value and cyclical stocks, typically
Bond markets, which have been under considerable pressure recently, saw a very sharp turnaround last week as the US Federal Reserve did no more than expected in the US, while the Bank of England kept rates unchanged, and the European
Market updates – 5 November 2021: Following September’s decline, US equities came back strongly in October following a better than expected Q3 results season. The month saw the S&P 500 up by 6.9% with a 3% gain in the last
The routine for many investors is to harvest losses in December. But end-ofyear harvesting could mean missed opportunities. There are many possible reasons why investors decide to harvest tax losses at the end of the year. Perhaps they take pride
Reaching a net-zero emissions energy system represents the biggest transformation the energy sector has ever seen. As we stand on the precipice of this transition it is becoming increasingly clear that we are in for a bumpy ride. With supply
After 18 months of exceptionally strong equity markets, most measures of valuations look high against their own absolute histories. The measure most favoured among long-time equity bears over the past decade or so has been the Shiller Cyclically-Adjusted Price Earnings
US equities printed a new high as we end October while bonds remain mired in volatility with yields near their highs for the last 12 months – see chart of the week. Meanwhile, risk markets in fixed income are locked
Global Sustainable Outcomes: There’s only one way to summarise Q2: a world divided. In North America and Europe economic recovery exceeded expectations as successful vaccination programmes supported market reopening. Here in the UK we emerged from a bleak winter of
China is a double-edged sword: it is the world-leading renewables developer, installing more than double the gigawatt (GW) capacity of its nearest competitor over the past decade both in terms of wind and solar power (Figure 1), but at the
If the world is to avoid more destructive climate change over the coming decades, every industry must change how it operates and strive to reach net zero carbon by 2050, in line with the 2015 Paris Agreement. Given that buildings
Our base case scenario for a return to normal is now Q4 2021, with a downside scenario in Q1 2022. At the beginning of the year, we created a Return to Normal Index to measure human activity data relative to
In Credit: US bond yields have stabilsed this quarter after the material sell-off in the first quarter. It has been a different story for yields in Europe, however, which have trended higher. This reflects a heavy supply schedule and speculation
The ‘excitement’ of an FOMC meeting, shenanigans at Evergrande, revised forecasts from the OECD and the German general election led to a rise in yields last week (see chart of the week). The US Federal Reserve presented a more hawkish
Some investors historically have seen Japan’s equity market as a constant source of disappointment. I can understand why. For 20 years, after Japan’s asset bubble burst and through the global financial crisis in 2009, it was a trader’s market. You
A broad spectrum of central banks fear climate change could spark the next financial crisis. For this reason, regulators in Europe and the UK are already beginning to scrutinise banks’ resilience to climate change – looking into both the likely
Earth Day is an annual global event supporting environmental protection that takes place on 22 April. To support this year’s theme ‘Restore Our Earth’, some of Columbia Threadneedle’s fund managers and analysts present their thoughts on important environmental issues from
