In this edition of VantagePoint, we review three big questions that are central to the path of the markets: 1) Will the US Fed pivot away from aggressive tightening?; 2) Will China move away from its zero-COVID policy?; and 3) Will Europe successfully manage its transition away from Russian energy imports?
Risk assets declined again in third quarter. Global equities recorded the worst three-quarter decline since the 2008–09 Global Financial Crisis.
Asian markets have had a difficult year, but while the current environment has been challenging for most investments, it has also created an opportunity for more defensive and diversifying strategies to add value. In this edition of Asia Insights, we focus on the case for Asia quality strategies within public equities; increased interest in India and Southeast Asia venture capital markets; private infrastructure and private credit as defensive strategies; and the value in Asia macro and equity long/short.
Risk assets broadly retreated in August, reversing course mid-month on the growing realization that elevated interest rates may be around longer than expected.
Yes. The Inflation Reduction Act (IRA) will generate significant benefits for companies involved in clean energy. The bill is anticipated to provide almost $370 billion over the next decade to a variety of industries, including utilities, transportation, and manufacturers of products such as batteries and solar components.
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.
Risk assets rebounded in July as stocks rallied off recent bear market lows and bond yields ticked lower, boosted by better-than-expected second quarter earnings results and signs that the Federal Reserve could slow the pace of interest rate increases sooner than anticipated.
Fiscal year 2022 was a challenging one for public market investments. Rising levels of inflation across most developed and emerging markets saw central banks become more aggressive in their monetary tightening plans. This in turn saw correlations between bonds and equities become positive; bonds declined as a direct result of higher inflation and tighter policy, while equities weakened in response to the higher cost of capital. This chart book presents returns and other market metrics for fiscal year 2022.
Investor sentiment soured in second quarter, leading to steep declines across nearly all asset classes. Global equities foundered as developed and emerging stocks alike fell into bear markets. Rising interest rates and deteriorating global economic growth prospects meant growth stocks trailed value, while large caps edged small caps. Aggressive monetary tightening and high inflation pressured government bond performance, while corporates lagged on rising credit spreads. Real assets also declined, with energy commodities being the lone exception among major asset classes as oil prices continued climbing. Against this backdrop, the US dollar appreciated to a 20-year high, euro performance was mixed, and UK sterling mostly weakened.
Risk assets continued their bumpy ride in May as investors attempted to discount a shifting economic narrative. Still, global equities posted only minor declines in local currency terms despite a meaningful increase in volatility. Value topped growth for the fourth time this year, while large caps outperformed small caps. Investment-grade bonds advanced as US Treasury yields mostly fell, whereas European government bond yields continued climbing across maturities. Commodities rose, driven by higher energy prices, while other real assets were mixed. The US dollar and UK sterling weakened, while the euro broadly gained on expectations of tighter monetary policy.