Economic & Strategy Viewpoint

Current views - March 2018

Our Investment team provide their current views on asset classes based on the status of markets.



Asset classes



Growth and inflation underpins a positive outlook for equities, however valuations cannot be described as cheap. The risk of a trade war is an increasing concern.


Fixed income

We prefer USD versus EUR and GBP, and prefer inflation linked bonds to nominal bonds.



Attractive diversification characteristics compared to equities and fixed interest.



Cash has defensive and opportunistic qualities in uncertain and volatile markets.





The economy continues to lag the expansion seen in other markets and political uncertainty remains. However, we are mindful of the market derating and that investors are underweight in the UK equity market.



Strong cyclical upturn in economic growth is supportive, although the strength in the euro may temper performance.


North American

Potential for a strong increase in growth and earnings is offset by higher valuations.



Stronger growth and inflation after many years of disappointment is driving a recovery in corporate earnings, and the yen remains relatively undervalued.


Asia Pacific

The increase in global trade is helpful to Asia Pacific although they performed strongly in 2017.


Emerging markets

Continued global growth should be supportive to emerging markets that are cheap relative to developed markets.


Fixed income


Government bonds

We remain negative on GBP and EUR bonds but US Treasuries are becoming relatively more attractive given the normalisation of yields that is taking place.


Investment grade

Credit spreads provide a small pick-up in yields but are at a historically narrow level.



High-yield credit spreads are at a historically low level so we remain wary.



Inflation-linked government bonds remain relatively attractive and provide a hedge against unexpected higher inflation and any currency weakness.


Emerging markets

Selectively, local emerging market bonds offer good interest rate and currency exposure.





Increased volatility and dispersion should provide opportunities. We favour trend followers and long/short strategies to fixed interest.


Commercial property (UK)

Post-Brexit concerns have resulted in the marking down of property valuations, but income characteristics remain attractive.



Gold is attractive as a diversifier, portfolio insurance and an inflation hedge.




Contact Schroders Wealth Management

To discuss your wealth management requirements, or to find out more about our services and how we can help you, please contact:

Marc Brodard

Marc Brodard

Head of Private Clients - Switzerland