Our multi-asset investment views - June 2019

Multi-Asset Investments

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Asset classes



We hold a neutral view as economic risks continue to be elevated and trade tensions weigh on markets.


Government bonds

We maintain a positive view as bonds’ reputation as a relatively defensive asset has been reinforced during recent periods of market stress.



We remain neutral on broad commodities, but we are positive on gold as it can be useful during market turbulence due to its perceived defensive characteristics.


Corporate Bonds

Valuations have become more attractive from a short-term perspective.





The momentum of the US stock market continues to be one of the strongest among the major markets.



The actions of the Federal Reserve in the US could result in a weaker US dollar and thus a stronger euro. This could hamper the recent improvement in European companies’ performance as their exports become less affordable.



Increasing probability of a ”no-deal Brexit” and weakening investor sentiment present a strong headwind for UK equity market.



We continue to hold a neutral view as export weakness remains an area of concern.


Pacific ex-Japan

We remain neutral as export weakness in Singapore continues to be a drag.


Emerging markets

Valuations seem attractive with potential to increase although trade wars could pose a threat. Those emerging countries with a more domestic (rather than export) focus present the most interesting opportunities.


Government bonds



We upgraded US government bonds (Treasuries) because of the weak economic outlook paired with continuous trade war rhetoric between the US and China. Both of which are likely to increase demand for Treasuries.



Upgraded UK government bonds (gilts) to positive, as investor demand for them may increase due to the rising probability of a no-deal Brexit. Investors tend to head for the perceived safety of government bonds at times of uncertainty.



We remain positive especially as we think the European Central Bank’s actions could support German government bonds.



Upgraded to positive as we think trade wars pose a threats to export demand and so investors may head for the relative security of bonds.


US inflation linked

We continue to be positive on US inflation.


Emerging markets local

Despite a more stable emerging markets outlook, we remain neutral as valuations have worsened which limits the upside potential.


Investment grade (IG) corporate bonds



Investment grade (IG) corporate bonds are bonds issued by companies. They are deemed “investment grade” by ratings agencies, which means they are seen as more secure than their non-investment grade equivalents. These bonds deemed more risky are called “high yield” bonds and are covered in the section below. We have upgraded US IG corporate bonds as we believe valuations have become more attractive.



We maintain a positive view as European economic fundamentals are strong and low interest rates provide additional support, because the higher rates available on corporate bonds means they remain in demand.


Emerging markets USD

Our view remains neutral as valuations are still unattractive.


High yield bonds



We remain neutral on US high yield bonds (discussed above) as valuations are still attractive, but longer term concerns remain.



We continue to hold a positive view as fundamentals are strong and valuations are appealing.





We maintain a neutral outlook.



We maintain a positive view on gold based on potential for further growth disappointments, weakening US dollar and further loosening in monetary policy. All these factors can increase demand for gold.


Industrial metals

We keep industrial metals at neutral.



We maintain a negative stance on agriculture as global stock levels look set to remain elevated.




US dollar

We upgraded the US dollar to positive as its status as it may be used as a hedge against global growth weakness.


UK sterling

We have downgraded sterling to negative due to reduced probability of a Brexit deal and weak economic data.


Euro €

Facing mixed medium-term and long-term drivers, we kept EUR as neutral.


Japanese yen ¥

Global growth weakness is likely to continue and so we have upgraded the yen as it could provide a safe haven in this environment.


Swiss franc ₣

We maintain a neutral view, as the weakness of European industry is spreading to Switzerland.


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