Asset Allocation – November 2017
SUMMARY : Upbeat market in October, led by Japanese equities / ECB asset purchase ‘recalibration’: still accommodative / EM: renewed idiosyncratic risks?
Equities’ upward momentum continued throughout October. Overall, this was fuelled by improved macroeconomic indicators and improving investor sentiment.
Japan led global equity markets, rising by 8.1% in local currency terms and by slightly less in US dollar terms due to the strengthening of the greenback. This resulted from Prime Minister Abe’s snap election victory, which should allow accommodative monetary policies to be continued.
Similarly, European risk assets were helped by Mario Draghi’s dovish tone as the ECB President announced the well-telegraphed tapering of the central bank’s asset purchase programme, carefully referred to as ‘recalibration’.
Asset Allocation November 2017
Just as it can be irritating to hear someone say “things used to be better than they are now”, it can be irritating and even offensive when you have reached a certain age to hear, over and over again, that the new generation outperforms the previous one. Although they have long been at the cutting edge of factor-based investment research, our quantitative investment teams do not suffer from this shortcoming.
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