Equities

Global Equity Performance Exceeds That of High-Quality Bonds

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Global equities have returned more to investors than high-quality global bonds in nearly three quarters of the last 30 years. The margin of outperformance during those years has been considerable, averaging 12.5 percentage points. That high historical success rate, along with our view that healthy economic activity will support both positive earnings growth and risk appetite, leads us to expect that equities will yet again outperform high-quality bonds.

Active Equity Manager Performance Benefits as Breadth Widens

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A market environment with a wider breadth of winners and losers provides greater opportunity for skilled active managers to distinguish themselves. Given the more balanced earnings contribution across sectors relative to 2020–21 and the widely dispersed equity valuations, we expect the breadth of winners and losers will be wider in 2022.

VantagePoint: China – Reassessing Risks and Opportunities

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As the second largest economy in the world, China remains an important destination for global investor capital. Yet, the pace and scope of China’s regulatory crackdown are causing concern. In this edition of VantagePoint, we review the nature of regulatory developments and their impact on the investment opportunity set. We believe that dedicated, strategic allocations to Chinese assets are still warranted. Investors should carefully consider their sector exposure and evaluate managers’ capabilities in the current regulatory and geopolitical environment.