Global Macro and Asset Allocation Viewpoints

Will 'Big Picture' investing win out in 2020?

With many asset classes having posted double-digit returns during 2019, some investors are beginning to consider whether returns may be harder to come by in 2020. Several strategists are suggesting that global macro strategies may be one approach that can add value in a year where uncertainty lurks, and both risks and opportunities abound.

This collection of recent papers outlines industry thought leadership and investment approaches which feature 'top-down' asset allocation views and several global macro views and strategies. To coincide with the WEF in Davos, Savvy Investor has also included recently published material from leading international think tanks and organisations.

Capital Markets View (MFS IM, Jan 2020)

MFS Investment Management shares its views on the outlook for Capital Markets, highlighting opportunities in UK and Asia ex-Japan equities, while remaining positive on EM sovereign debt, EU investment-grade corporates and US Municipal bonds.

Are Investors Ready For Big “What Ifs…?” 2019 Survey (Franklin Templeton)

(For compliance reasons, this paper is only accessible in the United States & Canada)

Franklin Templeton shares the results of its 2019 survey, commissioned by Institutional Investor, which explores US institutional investor attitudes to asset allocation. Survey data uncovers a surprising level of complacency in how respondents thought major shocks might affect investment portfolios and found increasing allocations to equities.

Rethinking safe haven assets (JP Morgan AM, 2019)

In this report, JP Morgan AM investigates traditional safe-haven assets, examines the trade-off involved in holding them, and suggests that some alternative assets might offer similar attributes.

Global Markets Pulse Survey (State Street, Jan 2020)

State Street surveyed over 100 asset managers and owners to get their views on the prospects for the investment industry in 2020.

Global Macro Trends: Play Your Game (KKR, Jan 2020)

KKR's in-depth report on global macro trends suggests that investors pick from the pack- and avoid the unloved and unwashed bottom decile, nor pay the lofty premiums ascribed to the top decile-across asset classes!

Five Multi-Asset Strategies for 2020’s Challenges (AB blog, Jan 2020)

(For compliance reasons, this paper is only accessible in Certain Geographies)

AB observes that after the outstanding returns generated over the last decade across most asset classes, things may prove much more difficult going forward. They suggest a multi-asset, disciplined approach may help to identify risks and opportunities.

Monthly Market Monitor (Eaton Vance, Jan 2020)

(For compliance reasons, this paper is only accessible in the United States & Canada)

This handy Monthly Market Monitor from Eaton Vance offers valuable insights across a range of asset classes in order to help aid and inform the investment process.

Seven Macro Themes for the New Year (PIMCO, Jan 2020)

PIMCO suggests seven macroeconomic themes that they expect during 2020, and what the implications might be of these for investors.

A new world order: China's place in the world (UBS AM, Jan 2020)

UBS AM takes a deep dive into several long term investible themes that have the potential to drive China's economy and influence the world.

The reemergence of global macro strategies in an unsettled world (Wellington, Jan 2020)

Wellington suggests that using global macro strategies may be one way for investors to consider approaching markets in 2020.

Capital Market Line: The Global Growth Marathon (PineBridge, Jan 2020)

PineBridge strategists argue that growth could reaccelerate in 2020 and 2021, which would support their contention that risk assets look more attractive than safety assets.

World Economic Outlook: Tentative Stabilization, Sluggish Recovery? (IMF, Jan 2020)

The IMF publishes its 2020 World Outlook Report.

The Global Risks Report 2020 (World Economic Forum)

Ahead of Davos, the WEF publishes its Global Risks Report, highlighting significant risks the world faces in 2020.

2020 Outlook: A Call for Resilience (Wells Fargo Investment Institute, Dec 2019)

Wells Fargo Investment Institute focuses upon late-cycle strategy, arguing that higher-quality assets, in both bonds and equities, are where investors should be directing their attention.

Strategy Insights 20/20 Vision (PNC, Dec 2019)

PNC offers its detailed report into how they see 2020 evolving from an investment perspective.

Long-Short Equity Strategies - “Hedging” Your Bets (Morgan Stanley IM blog, Jan 2020)

With equity markets at or close to record highs, Morgan Stanley IM's MD Eric Stampfel argues that investors would be wise to consider long-short equity strategies.

Managing Downside Risk with Global Macro Strategies (Morgan Stanley IM blog, Jan 2020)

Morgan Stanley IM Executive Director Robert Rafter suggests that two global macro strategies - those of long volatility and tail risk are worth considering in an environment where concerns about elevated markets are to the fore.

ABOUT THE AUTHOR

Andrew Perrins is a former Actuary and Asset Allocator. After qualifying as an Actuary, he worked for 15 years in investment management, serving as Director of Asset Allocation for Abbey Life and for Chase Manhattan, before setting out on a more entrepreneurial path.

To contact him, email [email protected]