The devastating loss of life resulting from Hamas’s surprise attack on Israel is at the forefront of our concerns. Risk of a prolonged conflict in the region has grown, creating a new layer of uncertainty on many fronts, including the global economy and markets.
Risk assets generally declined in Q3 as rising bond yields pressured fixed income and equity performance alike.
Most asset classes declined in August as higher bond yields and mixed economic signals weighed on risk appetite.
Risk assets enjoyed mostly positive returns in fiscal year 2023. Equities rebounded as fears over the severity of a possible recession moderated. Emerging markets equities lagged developed markets as the pace of reopening in China disappointed. Bond performance improved as credit assets posted positive returns but developed markets sovereign bonds struggled. Real assets suffered due to higher interest rates and slowing demand.
Risk assets rallied in July as slowing inflation and pockets of economic resilience supported performance.
Yes, the transition to a low-carbon economy is producing a myriad of productive ways to put capital to work.
Performance was mixed in second quarter as several crosscurrents painted an uncertain outlook.
Risk assets generally declined in May, with real assets posting the lowest returns across broad categories.
Commercial real estate is not immune to economic cyclicality, and we think the sector will be challenged through an economic downturn. However, we think cyclical pressures will likely create opportunities in select sectors and advise investors to selectively invest in these areas to benefit from a rebound during the recovery.
Asset performance is highly sensitive to the global business cycle. In this chart book, we highlight the significant shifts in performance distributions across the global business cycle for major asset classes, including equity regions, styles, sectors as well as for fixed income, real asset and currencies. Ultimately, understanding the distributions of asset performance across business cycle stages and considering where the global economy is headed are key inputs in a rigorous investment decision-making framework.