Multi-Asset Indicator – "never let a good crisis go to waste"

Insights and investment implications from the Multi-Asset and specialist research teams

Jul 17, 2020

12 minutes

Insights and investment implications from the Multi-Asset and specialist research teams

With markets staging a significant rebound in the second quarter of the year, thanks to unprecedented monetary stimulus, slowing growth rates of coronavirus cases and economies beginning to re-open, the hope is that the world economy will recover from its severe, sudden recession relatively quickly.

Clearly, the outlook for global markets will depend on a multitude of factors becoming increasingly dissimilar for each asset class and region as time goes by.

For equities, Europe’s aggressive policy action and the new green deal will be hampered by chronic over-indebtedness, lack of competition in digital technologies and a broken financial system. While emerging markets’ effective handling of the crisis and resilient corporate fundamentals, especially in Asia, make their stocks look attractive. In fixed income, UK gilts will offer little in value for the foreseeable future and investors would be better placed to look at EM hard and local currency bonds – yield advantages will matter such as in Mexico, Russia, Indonesia and South Africa. And, finally, investors shouldn't shy away from currencies, especially in Asia.

In the Multi-Asset Indicator, we assess the opportunities, risks and investment outlook across a broad range of global asset classes and regions. We include deeper dives into the following:

  • Equities: North America, Europe ex UK, UK, Japan, Asia ex Japan, Emerging markets
  • Government bonds: North America, Europe ex UK, UK, Japan, Asia ex Japan, Emerging markets
  • Currencies: US dollar, euro, pound sterling, Japanese yen, Asian currencies ex Japan, emerging market currencies

Philip Saunders also pens his views on Europe’s immense challenges – and the real motivations behind Germany’s volte-face policy pivot.

Though we are far from being out of the woods yet, and we expect an enormous amount of grim reality to hit as the economic data drips through in the coming months, there are significant opportunities for flexible and active investors to look forward to. As Winston Churchill stated, “Never let a good crisis go to waste”.

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DM Credit Indicator: Credit Chronicle 2020: Quarter 2

Read the quarterly investment review and outlook from Ninety One’s Developed Market Credit team. This covers the major global credit markets and includes a special focus article each quarter, to give a timely insight into a key topic for credit investors....

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