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Our multi-asset investment views - December 2023

We have downgraded our view on equities to neutral as we believe that our baseline view of a soft landing is now largely priced in. Find out more about our views on a range of asset classes here.

Multi-Asset Views - November 2023


Multi-Asset Investments

🟢 Long / positive

🟡 Neutral

🔴 Short / negative

🔼 Up from last month

🔽 Down from last month

Main Asset Classes

🟡🔽 Equities

We have downgraded equities to neutral as we believe that our baseline view of a soft landing is now largely priced in. We do, however, see pockets of opportunity as equity returns begin to broaden out.

🟡🔽 Government bonds

We have downgraded to neutral as rates have rallied alongside risk assets and the market has priced in significant rate cuts. We think that for yields to fall further, we need to see greater risks of a hard landing.

🟡🔽 Commodities

We have downgraded commodities to neutral this month given a lack of supply control in energy markets and as gold looks potentially overbought.


We have downgraded credit to neutral this month following a significant tightening of spreads and as fundamentals begin to deteriorate.



We maintain our neutral view, with a preference for the equal-weighted S&P 500 index as we expect a broadening out of performance away from the “Magnificent 7” mega cap technology stocks.


We maintain our neutral view due to pessimism surrounding the economic outlook while the Bank of England aims to maintain a delicate balance of taming inflation without undue impact on growth.


Improving economic data and cheap valuations make Europe attractive on a relative basis. The European Central Bank (ECB) is also expected to be the first major central bank to cut rates. However, a dovish Federal Reserve (Fed) and US exceptionalism presents a significant risk, and we prefer to maintain our neutral view.
🟡🔽 Japan

Whilst we continue to like Japan in the long term given its structural growth story, we are downgrading our view to neutral as we expect the yen to appreciate in the short term.

🟡 Global Emerging Markets1

Given that the manufacturing recovery will impact emerging markets in an uneven manner, we have maintained our neutral view.

🟡 Asia ex-Japan, China

We maintain our neutral view on China as weaker demand for housing continues to weigh on growth. We do, however, see early signs of life in the export cycle and bear in mind the possibility of more impactful stimulus measures.

🟡 EM Asia ex China

Although we maintain our neutral view, we do recognise the potential for Korea and Taiwan to outperform other emerging markets due to positive demand for semi-conductors.

Government bonds

🟡🔽 US

We have downgraded to neutral as the market has priced in multiple rate cuts following the latest Fed meeting.
🟡 UK

We remain neutral as although inflation has cooled, concerns surrounding persistently strong wage growth and supply-side issues remain

🟡 Germany

Markets may have priced rate cuts too aggressively at the short end of the curve, whilst more medium-term tenures should be supported by the eurozone entering into recession and inflation undershooting on the downside. For now, we prefer to remain neutral.

🟡 Japan

Although divergence in Japanese monetary policy persists, inflation has been building to historic levels and we expect the Bank of Japan (BoJ) could push ahead with normalising policy. For now, we maintain our neutral view.

🟡 US inflation linked bonds

We remain neutral. Although inflation returning is a risk, we believe the hiking cycle may have allowed the Fed to bring inflation under control in the short-to-medium-term.

🟡 Emerging markets local currency bonds

A dovish Fed could indicate a softening of the US dollar in the coming months which is supportive of emerging market rates. However, a hard landing remains a risk scenario and we prefer to implement this view via currency.

Investment grade credit

🟡 US

We maintain our neutral stance as a significant tightening of spreads makes US IG expensive on a spread-valuation basis.

🟡🔽 Europe

European bonds lagged the rally seen in the US last month, making them appear cheap on a relative and spread-valuation basis. The real estate premium is high; lower rates may induce a tightening of this premium, but overall, we prefer to downgrade to neutral for now.

🟡 Emerging markets USD

The light supply of bonds remains favourable, but continued expensive valuations mean we remain neutral.

High yield bonds (non-investment grade)


Whilst defaults are rising in US HY, these are currently contained and there exists a short window to continue harvesting positive carry before maturity walls close in.

🟡 Europe

We remain neutral in European HY where default rates are also steadily rising and the threat of maturity walls closes in, but the economic outlook is also worse than in the US.


🟡🔽  Energy

Whilst OPEC members recently agreed on further cuts, many of its constituents are failing to comply with pre-existing quotas, undermining any further cuts to supply.

🟡🔽 Gold

We are downgrading gold to neutral as despite buoyant central bank and domestic demand, recent levels look close to overbought.

🟡 Industrial metals

We remain neutral as although the supply-side remains tight, there is no current indication as to where demand will come from.

We remain neutral on agriculture as despite poor weather putting upwards pressure on wheat prices, the general outlook remains balanced.


🟡🔽 US $

Whilst we expect a divergence in US and EU policy, a surprisingly dovish Fed and the market’s reaction of pricing in excessive rate cuts leads us to downgrade to neutral.

🟡 UK £

Although the weak economic outlook is showing signs of improvement, we prefer to remain neutral for now.

🟡🔼 EU €

Whilst we expect the ECB to be the first central bank to cut rates due to the weak economic growth outlook, a surprisingly dovish Fed and more stringent ECB leads us to upgrade to neutral for now.

🟡 CNH ¥

We remain neutral as despite sluggish growth, we believe the currency exhibits positive asymmetry given recent lows and the possibility of an uptick in the export cycle.

🟡 JPY ¥

We remain neutral as despite indicators that the Bank of Japan (BoJ) is looking to scrap negative interest rates, the economy and wage growth has underwhelmed recently, and we believe that the BoJ will move cautiously.

🟡 Swiss franc ₣

We believe the Swiss National bank has completed its hiking cycle putting downwards pressure on the franc. However, a high correlation with global equities when paired with the euro and a dovish Fed leaves us to remain neutral.


Source: Schroders, December 2023. The views for equities, government bonds and commodities are based on return relative to cash in local currency. The views for corporate bonds and high yield are based on credit spreads (i.e., duration-hedged). The views for currencies are relative to the US dollar, apart from the US dollar which is relative to a trade-weighted basket.

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The views and opinions contained herein are those of Schroders’ investment teams and/or Economics Group, and do not necessarily represent Schroder Investment Management North America Inc.’s house views. These views are subject to change. This information is intended to be for information purposes only and it is not intended as promotional material in any respect.


Multi-Asset Investments


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