Weekly Market Compass Market uncertainty ramps up around the world
Despite strong earnings reports, the markets are reflecting some uncertainty and concerns related to geopolitical risks and growing deficits.
29 October 2024
Article
The Big Picture: Global Asset Allocation 2021 Q4
22 September 2021
Despite another good three months for cyclical assets, we are sticking with them within our Model Asset Allocation. We make minimal changes, with a reduction in the allocation to highyield credit (to Underweight) and a corresponding increase to equities (going further Overweight). Real Estate and equities remain our favoured cyclical assets, while cash is our diversifier of choice. We boost allocations to emerging market (EM), Japanese and UK assets, with an overall preference for UK and EM assets.
Model asset allocation
In our view:
- Equities offer good returns as the global economy recovers. We go further Overweight.
- Real estate (REITS) has the potential to produce the best returns. We stay at Maximum.
- Corporate high-yield (HY) is now less attractive. We reduce to Underweight.
- Corporate investment-grade (IG) now holds no advantage over cash. We stay at zero.
- Government debt outlook is poor. We remain Underweight.
- Cash returns are low but stable and de-correlated (it is our diversifier of choice). We stay at Maximum.
- Commodities are supported by the cycle but some are expensive. We remain Underweight.
- Gold is threatened by rising yields and a stronger USD. We remain at zero.
- Regionally, we favour the UK and EM (and are Underweight US assets)
Our best-in-class assets (based on 12m projected returns)
- UK equities
- EM real estate
- EM government
- USD cash
Related articles
Weekly Market Compass Stock market myths: Investors’ beliefs don’t always reflect reality
Myths and half-truths abound in the investing world, particularly in how stocks relate to the economy. But beliefs sometimes don’t reflect reality, and that could impact portfolios.
22 October 2024
Weekly Market Compass Early earnings calls indicate a resilient US economy
Earnings season has just begun, and initial calls indicate that the US economy appears to be in good shape, helped by higher income consumers and strong corporate balance sheets.
15 October 2024
Investment risks
-
The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.
Important information
-
Data as of 31 May 2021 unless stated otherwise.
This document is marketing material and is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell securities.
Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals, they are subject to change without notice and are not to be construed as investment advice.
