Yes. We believe the underperformance of Japanese small-cap stocks in recent years will reverse, boosted by attractive relative valuations, stronger balance sheets, and growing pressure from shareholders and regulators.
New Zealand has arguably fared better during the global pandemic than any other developed country. While 2021 should see the New Zealand economy continue to fare well, complacency is the biggest risk, both in regards to COVID-19 and global growth, but also in relation to sky-high equity valuations, both at home and abroad.
Interest in China’s onshore bond market has been rising steadily since 2016 when the market was thrown open to foreign investors. Foreign holdings of onshore bonds now exceed US$400 billion and are set to rise further. We think the market warrants further attention from global investors, given Chinese bonds continue to offer higher yields and lower correlations than those found in other major bond markets, with the potential to bring portfolio diversification benefits.
No, we still believe China remains an important exposure for investment portfolios. However, US-China tensions will continue to escalate. Investors need to reaffirm both the rationale and implementation of their China investment strategy and must communicate this with key stakeholders. For further reading, please see the “Decoupling” section of Celia Dallas and Wade O’Brien’s “VantagePoint:…
As the current market environment continues to rapidly evolve, we remind investors that reviewing the history of business cycles, returns, and valuations can help provide a framework for understanding the market today. Our 2019 edition of Decades of Data presents historical analysis on economic indicators, equity, fixed income, and cash markets across eight geographies over the very long term.
Global equities sold off sharply this week as cases of COVID-19 spread rapidly outside of China (particularly in Korea, Italy, and the Middle East). While the spike in volatility has been abrupt, the current market sell-off is arguably a needed correction.
Investors should stay calm. While the Wuhan coronavirus is still spreading, the virus remains less deadly and more contained than the SARS outbreak of 2002–03. Looking at other epidemics, history suggests that after an initial sharp hit, economies and markets typically recover quickly.
Yes, in the near term, but longer term we expect trade, tech, and possibly finances to decouple further.
The start of a new year and a new decade is an opportune time to reflect on megatrends that will be consequential over the next ten years. In this edition of VantagePoint, we focus on three such trends and their investment implications: disruption, demographics, and decoupling.
No, we do not think Federal Reserve rate cuts signal a major downturn in the US dollar.