We publish a Monthly Investment Outlook that highlights our convictions on equities and bonds, as well as recent asset allocation changes.
MONTHLY INVESTMENT OUTLOOK - A mature bull market is not something to fear
GLOBAL TACTICAL ASSET ALLOCATION - Stay overweight equities with focus on quality
UBP ECONOMIC OUTLOOK - Towards moderate expansion
UBP ECONOMIC OUTLOOK - Fed's monetary policy : progressive end of support
GLOBAL BONDS - Favour short duration debt
GLOBAL EQUITIES - Increasing focus on high quality companies
RECENT VIEW CHANGES - Favour quality and adding asymmetry
Global equity markets continued to climb in August while fixed income investors saw headwinds with rising risk-free yields joining volatile credit spreads in the month.
After a strong reopening driven rebound, global expansion is expected to moderate in the coming quarters.
Global expansion should continue, but at a more moderate pace after a strong recovery in H1-21. Despite virusrelated uncertainties, a return to full lockdowns is not expected. However, emerging countries are still lagging with vaccinations and face continuing restrictions suggesting a slow recovery trajectory ahead.
The Jackson Hole symposium is often a good time to present new developments in monetary strategy; last year, it was about a flexible average inflation target and this year is about tapering i.e., preparing the Fed’s exit strategy .
Markets have been hesitant amid the increasing probability of a Fed tapering, mixed economic data and growing concerns about the economic impact of the Delta variant.
Helped by notably strong Q2 earnings, global equity markets rose to new all-time highs in August, with some volatility mainly due to the potential impact of the Delta variant.
The US economic recovery is increasingly mature and has already started the next stage, a “Mini-cycle” as expected. Equity volatility and drawdowns should increase looking ahead. A proactive and dynamic risk management approach therefore becomes increasingly key to navigating the final stages of the recovery phase.