Yes. Inflationary pressures in the United States appear to be building, as positively trending wages, expansionary fiscal policies, and protectionist trade barriers feed into a humming economy. Although we expect these pressures signal an increased risk of an inflation scare, we believe the most likely outcome in 2018 is for inflation to grind only modestly higher.
In our 2018 outlook, we review the prospects for several asset classes—developed and emerging markets equities, credit, real assets, sovereign bonds, and currencies—and share the advice of our chief investment strategist.
Yes. Although investors do need to be mindful of the long-term transition occurring in energy markets, we don’t believe that mindfulness should preclude new investments in top-quality traditional private energy managers.
The potential for strong performance and use as a diversifier give private energy investments merit as part of portfolios.
New private infrastructure fund investors can find value in carefully evaluated managers and strategies, but they should ratchet down return expectations relative to years past.
We doubt it. But, price levels are likely to rise gradually in the months ahead, as the rebound in energy commodities continues to impact measurements.
Change is in the air and the prospect for a bit of sunshine to break through the overhang of slow growth and lower-for-longer yields is palpable. Of course, the sun doesn’t shine forever, and overall our views are little changed. The things we have been worried about for some time—high valuations for certain risk assets, record-low interest rates, slow economic growth—have not gone away. The surest call to make for 2017 is that higher growth expectations will be paired with the distinct possibility of negative outcomes, putting a premium on diversification and liquidity management.
We remain cautious on UK property, but bold investors may find opportunities in the post-‘Brexit’ environment.
Yes, though we expect natural resources equities (NREs) to continue to benefit from the rebalancing of supply and demand occurring in oil markets, irrespective of whether the 14-nation cartel follows through on its provisional deal to limit production.
No, but we do expect UK commercial property prices to re-rate to a lower level as investors grapple with the consequences of the Brexit vote.