NN IP: Asset allocation: World on fire

The shocking events in Nice and Turkey in the past two weeks underscored once more how fragile many of our societies have become. But next to the raging fires there is still more than enough sunshine that can brighten the future of our societies. It will not be an easy path to arrive at the desirable destination, however.

Economic Outlook

• Global growth is likely to improve moderately   
• Emerging markets: Turkey and China

Global growth should improve moderately

The multitude of shocks to the global economy in the past few years have demonstrated that growth is surprisingly resilient. Much support is coming from the stabilisation in emerging economies and from global consumer spending.  Read more


Asset Allocation

• The world looks risky, but opportunities remain 
• Risk on tilt remains with firm preference of risky assets over government bonds 

World on fire

The shocking events in Nice and Turkey in the past two weeks underscored once more how fragile many of our societies have become. But next to the raging fires there is still more than enough sunshine that can brighten the future of our societies. It will not be an easy path to arrive at the desirable destination, however.  Read more

Fixed Income 

• Spread levels have fully retraced from Brexit sell-off 
• We favour EMD Hard Currency Sovereign bonds and US High Yield 

Search for yield boosts spread product performance

Spread products have fully recovered from Brexit-induced risk aversion and are now welcoming inflows from investors in their search for yield. Especially non-European categories outperformed and this is also where our preferences are.  Read more

Equity Strategy

• Economic momentum is positive, earnings beat estimates
•  We upgrade emerging market equities to overweight

Upgrade emerging market equities to overweight

Since Britain voted to leave the European Union, global equity markets have rallied. Given the economic doom scenarios that were predicted before the vote, not only for the UK but also globally, this market reaction may look strange. How do we explain this ‘camping rally’?  Read more

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