Posts Tagged ‘asset allocation’

House View, June 2019

Asset allocation We have turned tactically underweight on global equities, including US equities, given elevated valuations, mixed economic data and rising trade tensions. We remain neutral on euro area equities, where valuations are generally more reasonable than in the US. We have also moved from an overweight to neutral stance on Asian emerging-market equities. At […]

Avenues worth exploring in strategic asset allocation

Using macroeconomic regimes for asset allocation We have identified three broad growth and inflation regimes. Analysis of the combined macroeconomic regimes shows a high degree of correlation between these regimes and asset returns. Using growth and inflation data stretching back to the end of World War Two, we have developed a meth­odology that identifies nine […]

House View, May 2019

Asset Allocation There were no changes to our asset allocation in April. While we are encouraged by better-than-expected Q1 earnings and some improvement in earnings expectations, we remain neutral on global equities as we await new catalysts to justify current valuations. At the same time, we have a positive view of Chinese and Indian equities. […]

House View, April 2019

Asset Allocation Although we expect the economic picture to brighten and the decline in earnings expectations to end, we have a prudent stance on global equities, as expressed in our decision to book some profits on global equities and to invest in put options on large-cap European and small-cap US equities. At the same time, […]

Taking account of regime shifts

Predicting the returns for different asset classes is the Holy Grail of asset allocation. The problem is that risk premiums and returns are instable over time. According to our analysis, over the long term (our data stretches back 115 years) there is a 90 percent probability of achieving an annual average return of 8 percent […]

House View, November 2018

Asset Allocation While the recent sell-off might have been overdone in view of fundamentals that remain basically sound, market gyrations and our expectation of further volatility mean we remain neutral equities overall. The current environment favours active management and a tactical allocation approach, exemplified by the partial sale of equity options we acquired to protect […]

House View, October 2018

Asset Allocation We remain underweight or neutral across a number of risk asset classes and overweight liquidity in light of enduring uncertainties, but stand ready to deploy cash as tactical opportunities present themselves. We are neutral DM equities, but pockets of opportunity still exist (in the UK and Japan, for example). EM equities are becoming […]

House View, September 2018

Asset Allocation We maintain our neutral stance on equities overall on a rolling three-to-six month basis. We do have a more upbeat assessment further out, but the autumn is shaping up to be a sensitive time for risk assets overall. Recent sell-offs validate our cautiousness regarding emerging-market (EM) assets in general. But valuations are becoming […]

House View, August 2018

Asset Allocation On a tactical, rolling three-to-six-month basis we are maintaining our neutral stance on developed-market equities in general in light of increasing trade and political frictions, but we remain more upbeat on their prospects further out. We have a bullish short-term stance on Asian (ex-Japan) equities given their increasingly attractive valuations but we are […]

House View, July 2018

Asset Allocation On a tactical, rolling three-to-six-month basis, we are tilting away from a bullish to a neutral stance on developed-market equities as trade and political frictions are rising. That said, we remain more upbeat on their prospects after the summer. Recent sell-offs have vindicated our cautiousness regarding emerging-market assets in general. But valuations are […]

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