In this edition of VantagePoint, we review the drivers of US outperformance in the context of historical expansions, consider what markets are pricing in, and if stronger fundamentals for US equities justify higher valuations.
No. Although emerging markets stocks typically outperform after the onset of Federal Reserve easing, we suspect this episode will be different.
This publication presents manager performance for 37 asset classes and substrategies, showing the median, mean, and key percentiles of return. Relevant indexes for each asset class are also included to provide market context.
UK GDP fell by more than expected in fourth quarter 2023, which pushed the country into a technical recession. It joined fellow G7 economy, Japan, which had earlier undershot expectations and delivered a second consecutive quarter of negative growth.
Equity markets continued to climb in January, led by developed markets equities, where Japan and Europe ex UK outperformed.
Risk assets enjoyed mostly positive returns in CY 2023. Developed markets equities led as fears over the severity of a possible recession moderated and inflation declined.
Risk assets soared in Q4, sending calendar-year returns for several asset classes to multiyear highs.
This publication presents manager performance for 37 asset classes and substrategies, showing the median, mean, and key percentiles of return. Relevant indexes for each asset class are also included to provide market context.
We expect global equity performance will be below its long-term median level, but we believe investors should hold equity allocations in line with policy targets. Within equities, we see opportunities in developed value, developed small caps, and China. We doubt European and emerging markets ex China equities will outperform, and we believe the share of active strategies that outperform will increase.
Global equities enjoyed a blockbuster month, up 8%, led by the United States.