Our multi-asset investment views - July 2019

Multi-Asset Investments

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Main Asset classes



We maintain a neutral view as weakening economic momentum is offset by support from dovish central banks.


Government bonds

We hold a positive view as although valuations look stretched, bonds remain a useful defensive asset in portfolios in times of market volatility.



We remain neutral overall on commodities, but we are positive on gold as it can be useful in times of increased liquidity and geopolitical risks.


Corporate bonds

We are positive as attractive short-term valuations offset longer-term concerns over fundamental credit quality.





We are positive as the momentum of the US stock market continues to be one of the strongest among the major markets, despite valuations becoming less appealing.



Political uncertainties and the risk of a sterling bounce in the longer term are the main headwinds for the UK equity market (a stronger pound tends to be negative for UK shares as when overseas earnings are translated back into sterling they are worth less).



We remain neutral. A dovish US Federal Reserve (Fed) may weaken the US dollar against the euro and threaten the recently improved European earnings outlook.



We maintain a neutral view as although there are signs of a recovery, export weakness remains a concern.


Pacific ex-Japan

We continue to hold a neutral view as export weakness in Singapore remains a drag and momentum is lagging.


Emerging markets

A positive G20 outcome may alleviate near-term pressures, but trade concerns are likely to continue. Markets with a stronger domestic focus present the most interesting opportunities.


Government bonds



We remain positive as the weak economic outlook and continuing US-China trade war rhetoric are likely to increase demand for Treasuries.



We remain positive as UK government bonds (gilts) could profit from further political uncertainty in the UK. In particular, the increasing threat of a “No-Deal” Brexit. Investors tend to head for the perceived safety of gilts at times of uncertainty.



We have upgraded to double positive. Increased liquidity, investors seeking yields higher than cash rates and possible new stimulus measures by the European Central Bank (ECB)  should benefit bonds with longer maturities.



We are positive as export weakness because of the continuing trade war may drive investors towards the relative safety of bonds.


US inflation linked

We continue to be positive on US inflation.


Emerging markets local

We have upgraded to single positive. More dovish tones from major central banks should provide support as investors search for yield.


Investment grade (IG) corporate bonds



We remain neutral as although technical data has improved, valuations have deteriorated.



We maintain a positive view as dovish statements and new appointments at the ECB have increased the likelihood that accommodative monetary policy will continue.


Emerging markets USD

We remain neutral as valuations are still unattractive.


High yield bonds



We remain neutral on US high yield bonds as although valuations are attractive, concerns over fundamental credit quality remain.



We remain positive as although valuations are less appealing, the fundamentals are still attractive.





We maintain a neutral outlook.



We are positive on gold as dovish Fed comments and escalating geopolitical tensions in the Middle East will likely increase demand for the precious metal.


Industrial metals

We maintain a neutral stance on industrial metals.



We are negative on agriculture due to uncertainty on production and Chinese imports.




US dollar

We remain positive on the US dollar as it may be used as a hedge against weaker global growth.


UK sterling

We remain negative on the pound as the increased probability of a “no-deal” Brexit compounds the effects of weak economic data.


Euro €

We remain neutral as the ECB’s recent indication of further stimulus is a headwind for the euro.


Japanese yen ¥

We are positive on the yen as its safe haven status could prove beneficial in a weak economic environment.


Swiss franc ₣

We remain neutral on the Swiss franc as European industrial weakness is spreading to Switzerland.


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