Schroders Investment Weather Forecast: US shines in mixed outlook for multi-asset
In 2015 we see a mixed weather front across multiple asset classes and regions, with diverging monetary policy and stretched valuations.
Regarding monetary policy, we would expect the US Federal Reserve to tighten interest rates later this year, whereas we believe the European Central bank, the Bank of Japan and the People's Bank of China are likely to continue with their expansionary monetary policies.
There will be fewer opportunities to benefit from cheap valuations than has been the case in recent years.
Growth is reasonably weak and there is no inflationary pressure of which to speak.
We expect the sunniest weather to be in the US, which is our favourite equity market, and we are bullish on the dollar’s prospects.
In the rest of the world we expect to find pockets of value in certain European sectors and we are cautious on Japanese equities.
We have a neutral stance towards government bonds, with a slight preference for those with longer maturities.
We are in a low-yielding environment and market volatility has been picking up significantly compared to recent years. We are focusing on managing our clients’ portfolios with a global, flexible and dynamic approach, using an unconstrained opportunity set and keeping a very keen eye on managing risk.