Given our view that 2022 will be a year of transition and that asset class returns will converge, we adopt a more balanced approach within our Model Asset Allocation, though still maintain a preference for cyclical assets. We reduce the equity allocation to Neutral and increase the allocation to bonds, by raising high-yield credit (to Maximum) and investment-grade credit (to just below Neutral), though we reduce government bonds to the Minimum allowed. From a regional perspective we have added to emerging market (EM) and Eurozone allocations, while reducing exposure to the US and Japan. We also consider alternative scenarios.
In our view:
Our best-in-class assets (based on 12m projected returns)
Nageen Javaid, Invesco Associate Client Portfolio Manager, discusses the role of bonds in the transition. As achieving net zero carbon emissions by 2050 has become a central goal for governments, corporations, and environmental advocates worldwide.
In our regularly updated macroeconomic analysis we offer an outlook for interest rates and currencies – and look at which fixed income assets are favoured across a range of market environments.
Paul Jackson, Global Head of Asset Allocation Research for EMEA, discusses his insights on portfolio allocations and strategies for the 2025 outlook.
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