Every month, our Asset Allocation Committee meets to discuss and debate our market outlook. How has our asset allocation changed month-on-month? Here Bernard Swords, Chief Investment Officer, presents our views.
So far, it has been a summer of discontent for financial markets as interest rate expectations in the euro area and the US ramp up. The fixed income markets have been bearing the brunt of it. Since the last issue of Top Down, the broad euro area bond market is down over 5% and the 10-year yield moved from 1.1% to just over 1.8%. Equity markets have held up slightly better, but they are still down over 3% in euro terms.
The themes have remained the same: inflation is proving to be more persistent than forecast prompting central banks to indicate tighter policy; there are growing fears about what that means for growth in 2023; and the continuing war in Ukraine is keeping commodity prices elevated.
How has this impacted our asset allocation? And what is our market outlook?
To find out, read our latest edition of Top Down.
Previous editions of Top Down
Explore some of our previous editions of Top Down to see how our asset allocation views have changed this year.