Asset Allocation In spite of a certain loss of momentum in positive surprises, a strong Q1 earnings season continues to justify our bullish stance on equities in most regions. We reiterate our negative view on core government bonds and remain short duration. Volatility is still higher than last year, and has increased noticeably in the […]
Asset Allocation While macroeconomic and corporate fundamentals still favour risk assets, challenges have been steadily increasing and a lot of good news is already priced into valuations. We sold part of our equity overweight during the early March rally. Even though we have become more prudent about equities’ short-term prospects, we expect to be able […]
Asset Allocation Although markets steadied as February progressed, volatility is unlikely to return to the low levels seen last year. Yet, after a good earnings season, and with strong, synchronised growth, we remain comfortable with our positive stance on developed-market equities. The potential for increased volatility opens the way for trading opportunities – but also […]
Asset Allocation Current conditions vindicate our continued bullish stance on equities in developed markets and emerging markets (Asia more than Latam). Valuations are high, but they are justified by upwards adjustments to expected earnings growth. But with long-term rates rising, we are expecting a rise in volatility from their low current levels. This should benefit […]
Asset Allocation Economic and earnings growth continue to offer good momentum and the possibility of upside surprises for 2018, so we remain overweight developed market (DM) equities. However, uncertainties over other key aspects of the outlook mean that investors may be unwise to lower their defences. We are keeping tail risk mitigation in portfolios. Emerging […]
Asset allocation Economic and earnings growth continue to offer good momentum and the possibility of upside surprises for 2018, so we remain overweight DM equities. However, uncertainties over other key aspects of the outlook mean that investors may be unwise to lower their defences. We are keeping tail risk mitigation in portfolios. EM equities should […]
Asset allocation We remain constructive on equities, which are being underpinned in particular by robust earnings growth. However, there are signs of pressure, especially in forex markets, and occasional spikes in volatility are likely, notably as a result of geopolitical risk. It is worth considering risk mitigation for portfolios put options on equity indices are […]
Asset allocation Headline volatility on equity markets remains low, and given robust economic and earnings growth we are still constructive on equities, particularly the euro area and Japan. We are neutral on the US, selective on Swiss stocks, and underweight the UK. However, there are signs of pressure, notably in forex markets, and headline volatility […]
Asset allocation There are two ways to hedge geopolitical risk: buying gold or buying protection for portfolios. We prefer the latter, to take advantage of current low volatility and because gold’s gains so far this year reflect the depreciation of the dollar. We remain constructive on DM equities, particularly the euro area and Japan. We […]
Asset allocation We retain a slight overweight in DM equities owing to good fundamentals, but it is especially important at present to be well protected against downside risk. Markets appear unduly complacent, and volatility could rise in the coming months. This will create opportunities for tactical trading and especially hedge funds. Low correlations and a […]
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