Capital Markets Outlook | Q1 2021
Asset Allocations: Generally neutral allocations in early 2021
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 |
We favor large-cap U.S. equities
With neutral weightings in most equity categories, we see the potential for U.S. large-cap equities to continue to rise in early 2021.
We have dialed down high yield
We are also neutral on most areas of fixed income, and favor reducing the overweight to high yield from late 2020.
Increase to commodities
Given the unusual nature of the crisis, it will be important to have tactical flexibility and open-mindedness to the idea that the recovery is also likely to be unusual.
The market’s potential sugar high
January 14, 2021 | Capital Markets Outlook
Amid a likely tug-of-war between positive and negative economic news, we favor investing with a flexible approach.
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