In our latest Money Monitor report, we share a comprehensive analysis of flows in European openended funds and ETFs. We also look at the main investment trends observed over the past month. Key takeaways: The increased anxiety brought by the
Volatility returned to markets as Omicron, a new Covid-19 variant, spooked investors. With 50 alterations, including 33 on the spike protein, markets were left scrambling for clues regarding its contagiousness, its lethality and the efficacy of vaccines and treatments. Several
In our Money Monitor report, we provide a comprehensive flow analysis in European open-ended funds and ETFs. We also look at the main investment trends observed over the past month. Key takeaways: September proved challenging for investors. They faced increased
A gradual transition toward a more 'normal' mid-cycle… We think global growth has peaked but will remain above average, boosted by broadening consumption and surging capex. A return to more 'normal' has already started but will likely take more time
Macro managers' returns are positive year-to-date but are still lagging their benchmarks. Their alpha was hit twice by the end of March and June. Managers adequately positioned early this year on rising yields and tapering through bond shorts and steepeners.
Trading conditions in China have severely deteriorated. After reaching their peak by mid-February, stocks lost earlier gains in March, on evidence of a plateauing economy and as stretched investors' positioning unwounded. Chinese markets were then stuck in a volatile trading
Since March and April tapering and inflation concerns eased up, U.S. value stocks have regained their lost ground and are outperforming growth stocks by 40% since the vaccine announcement late 2020. How long the value rally will last is yet
Economic data portrays sustainable growth in China, but it’s still unbalanced and plateauing. It remains driven by manufacturing and exports, but consumption lags, and impacts from ongoing authorities’ targeted deleveraging and reforms are starting to show. They are focused on
Event-Driven strategies saw exciting developments in recent quarters, in a context where global M&A volumes saw the strongest start to the year ever. Global M&A volumes, close to USD 1.5 trillion year-to-date, were fueled by a flurry of U.S. acquisitions
Volatility in interest rates year-to-date has unevenly impacted credit markets. Investment grade credit (IG) weakened in sympathy with sovereign yields, especially in high quality and long duration paper. IG bonds were down -3.6% in the U.S. year-to-date, and -0.5% in
As we go to press, it looks likely that Democrats will also run the Senate, in addition to the White House and the House of Representatives. With expectations that this will translate into greater fiscal stimulus in the near-term, bond
The Weekly Brief Since the U.S. presidential election on November 3 th, the USD has started a descent that may have legs under the new administration. The easing of trade tensions and an accommodative policy mix could put additional pressure
Amid the sound and fury of renewed Covid-19 lockdowns across Europe, global equities took a plunge at the end of October, bringing the MSCI World down -3% for the full month. Bonds did not provide much protection, as fiscal stimulus
The weekly brief Momentum is a strategy which buys stocks trending higher and sells stocks on a downtrend within an index. It is systematic and has no considerations for earnings, valuation, or other fundamental metrics such as dividends. Historically, it
Virus containment is progressing unevenly, advanced in Europe and Asia, but concerning in the U.S. and Latin America. Meanwhile, lockdown easing and economic reopening is accelerating worldwide. With a full global economic recovery priced-in for 2021 and stimulus reflected in
The Special Situations strategy went through a roller coaster since February. Typically, due to their long structural market beta, managers tend to underperform in risk-off episodes. However, as they also tend to look beyond short-term volatility, they usually rebound faster.
Two thirds of the S&P 500 companies have now reported. Earnings are expected to settle at -14% in Q1 y/y, with the steepest drops in the consumer discretionary, financial, industrial, base material, and energy sectors. Revenues would grow only +0.5%
Lyxor mutual fund selection After an exceptional year in 2019 for risky assets, the first of quarter 2020 proved to be an unprecedented period in market history. The rapid spread of the Coronavirus led to a sell-off across the board
Market conditions improved in the wake of the aggressive Federal Reserve announcements to tame risks in the financial system (link). The MSCI World bottomed on March 23rd and rose more than 20% since then, leaving the broad equity market benchmark
The weekly brief The crash in credit markets this week levelled with that of the 2008 financial crisis. Spreads widened at unprecedented velocity, in extreme trading volumes. U.S. and EU HY indices were down about -7%, with record outflows. Credit
Risk assets have largely shrugged off recent headwinds on the back of robust macro and corporate dynamics in the U.S. The Q4-2019 earnings season delivered better than expected outcomes especially in the Technology sector. Meanwhile, labor market conditions remain buoyant
Uncertainty remains but we still expect a transitory economic impact from the Coronavirus outbreak. In a best- case scenario, authorities measures could help reverse the trend within weeks, with containment by the end of Q1. In a base-case scenario, the
The year that has just started will challenge investors’ expectations, just as 2019 eventually contradicted the bearish mood that prevailed one year ago. For the time being, risk appetite remains strong and we believe it is unlikely to be derailed
Macro and Market Views The year may well end as it started: on a strong note. 2019 will probably be remembered as a year when it was very costly to be O/W cash compared to anything else. After such an
The Weekly Brief There are structural reasons as to why Chinese equities could provide a fertile ground for alpha. First, flows into China could support both beta and alpha. China accounts for only 8.5% of the world market cap, in
An Indian summer for European ETF flows After the records we saw set in September, European ETFs continued to enjoy steady inflows in October and gathered €10.7bn. Those inflows were predominantly driven by equity (+€5.3bn) and fixed income (+€2.7bn). Flows
Soft manufacturing surveys are bottoming out, pointing to a turn in hard data. Monetary accommodation and less uncertainty on most trade fronts have been key contributors to this inflection, as well as front-loading ahead of the September tariffs. A modest
Managed Futures remains the best performing alternative strategy year-to-date, up 9.2% according to our estimates. But after a massive rally up to end-August, the hangover came with a sharp rise in bond yields in the past couple of months. The
The coming months will bring with them a change in context. In addition to the five major sources of uncertainty that have rocked the market since the beginning of the year, there is now a new feature in the landscape:
Should alternative portfolios favor smaller, medium, or larger hedge funds? The choice might not be as obvious as before and may be more dependent on the stage of the business cycle. For many years, small hedge funds have steadily outperformed
Earnings seasons provide valuable insights on alpha. They track inflections in business dynamics, which are key catalysts for stock selection. They also provide a barometer on investors’ readings on and interest for companies’ fundamental changes, with limited noise from other
Active strategies’ relative performance in Q3 were slightly weaker than in Q2, though uneven across regions. Uncertainties soared early in Q3 with the breakup of the summer U.S.-China trade truce and bold British PM Johnson’s tactics. Later, signs of a
Why using ESG helps you build better portfolios Increasingly, investors are integrating ESG considerations into their portfolios. However, there’s still a widespread belief that investing sustainably means giving up on potential returns. In this paper, we focus on the role
Timing CTAs is notoriously challenging. Monitoring their exposures provides a useful picture but has rarely been a reliable allocation method. They enjoyed an impressive rally this year, mainly supported by their long bond positions, which fueled high CTAs returns’ auto-correlations.
How changes in ESG ratings affect price Can you do well by doing good? Environmental, social and governance (ESG) investing has undeniably begun its ascent to the mainstream. This trend not only suggests investors are more readily prepared to pursue
Equity markets have now fully recovered lost ground after the U.S. stepped up tariffs on China imports in early May. Bullish sentiment has been fueled by expectations of a reboot of U.S.-China trade talks and central banks cuts. Earnings momentum
The Weekly Brief Last week Lyxor Cross Asset Research team addressed the positive performance of CTA strategies during the market downturn, which started a few weeks ago and dragged global equities nearly -6% lower in May. This fact is nonetheless
6 steps to a better portfolio After a disappointing year in 2018, active managers have bounced back to a degree, notably in fixed income.
The Weekly Brief The recent U-turn of major central banks from monetary normalization to renewed accommodation beat market expectations. In particular, the minutes from the FOMC meeting held on 29-30 January suggested the likely ending of the balance sheet runoff
The Weekly Brief Data crunchers are finding little evidence of a growth deceleration in the U.S. so far in 2019. The job market remains buoyant and business surveys signal robust manufacturing activity in January. On the contrary, in the euro
The Weekly Brief In recent weeks, market conditions switched swiftly from panic mode to exuberance mode. Active investors are scratching their heads as markets no longer seem to be discounting a U.S. recession and any Fed rate hike in 2019.
The weekly brief The market rebound started at end of December has taken place amid an easing of trade tensions and hopes that a no-deal Brexit will be avoided. A softer stance from major central banks has also been supportive.
The Weekly Brief The market rebound since end of December is in stark contrast with the adverse conditions that prevailed in December for risk assets. In our view, the main reasons behind the turnaround are related to: i) a softer
The weekly Brief 2018 ended with investors hesitating between several scenarios, which led to widely different performance patterns. Summarized below, none can fully explain alone recent prices actions. We do not expect a recession, rather we anticipate a global growth
Investment Strategy Richly valued assets Firmer underlying inflation Heterogeneous monetary policy Doubts on global growth
The Weekly Brief The confirmation of a changing Federal Reserve System’s ("Fed”) tone and hopes for a truce in the U.S. trade standoff both supported risky assets this week. Rates have been trending down since mid-November, in sync with a
Homeward bound European equities have recently returned to favour with investors, probably because valuations don’t look as demanding as they do over the pond.
The Weekly Brief Doubts about global growth eventually caught up with oil prices when supply risk unexpectedly eased. Over the summer, spiking oil prices and assurance from the U.S. that no sanction waiver on Iran crude imports would be granted,
Outlook Q4 2018 Gradual weakening of manufacturing momentum More resilient services sector Global economic expansion still solid, but risks to the downside
The Weekly Brief Equity markets seem to have reached a low after the recent sell-off but the recovery has been uneven. U.S. and Japan equities have risen 5% since the trough on October 29th while EMU equities are lagging (+2%).
