Capital Markets Outlook | Q1 2022
Asset Allocations: We have reduced risk and adopted a tactically neutral posture.
|
Current quarter Previous quarter Change from previous quarter |
Underweight | Neutral | Overweight |
|---|---|---|---|
| Equity | |||
| U.S. large cap | |||
| U.S. small cap | |||
| U.S. value | |||
| U.S. growth | |||
| Europe | |||
| Japan | |||
| Emerging markets | |||
| Fixed income | |||
| U.S. government | |||
| U.S. investment-grade corporates | |||
| U.S. mortgage-backed | |||
| U.S. floating-rate bank loans | |||
| U.S. high yield | |||
| Non-U.S. developed country | |||
| Emerging markets | |||
| Commodities | |||
| Cash |
Currency viewsU.S. dollar versus |
Favor other | Neutral | Favor dollar |
|---|---|---|---|
| Euro | |||
| Pound | |||
| Yen |
Neutral on equities
No longer positioned for the reflation trade, we have moved to neutral weightings in equity classes.
Slight preference for high yield
Given the global search for yield, we favor high-yield bonds over assets like emerging market debt.
Commodities remain neutral
After a volatile year for commodity prices in 2021, we remain neutral.
Revisiting the rates conundrum
January 12, 2022 | Capital Markets Outlook
Bond bears expecting bad news in 2022 should think about the stubbornly low yields of the past two decades.
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