Higher yields, worries about rising inflation and slowing growth, and the prospect of more – and larger – US rate rises have left financial markets reeling, resulting in returns that have rarely looked weaker and leaving 60/40 portfolios nursing double-digit losses reminiscent of the global financial crisis of 2008. What of asset class positioning in this scenario?
Maya Bhandari, head of multi-asset, and chief market strategist Daniel Morris discuss the reasons for a short position in core duration assets in the US, Europe and Japan and being long commodities.
Amid mixed, if not over-optimistic, earnings forecasts, equity valuations may have improved, particularly for growth stocks in the US. However, European equities notably face downside risk to their cash flows. Chinese equities now look relatively cheap, particularly in the technology sector. Watch our monthly video with Maya and Daniel for details.
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