Pictet AM Smarts

Welcome back to Pictet AM Smarts, our regular roundup of articles analysing the trends shaping the economy, markets and society. In this month's newsletter, our experts share how Donald Trump's election might impact portfolios, explore the risks and opportunities of the net zero transition for investors, and demystify flexible fixed income strategies. Happy reading!

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After the election: What does Trump's victory mean for markets?

A Donald Trump presidency should be good news for the dollar and US equities, but less positive for US bonds and emerging markets - as our senior multi-asset strategist explains in this article . When it comes to fixed income in particular, bond and currency markets had already priced in a high probability of Donald Trump’s victory. The question now is, which version of Trump are we likely to get – because there are three possibilities, each of which has different implications for the fixed income market. Read more here .

Our latest research: Energy transition risks and opportunities

The UN COP29 climate summit that kicked off yesterday in Baku, Azerbaijan, aims to tackle the funding of the green transition. In our comprehensive study conducted with the Institute of International Finance , we uncover the risks associated with the transition and their implications for investors. We examine three broad categories of risks:

• Growing debt burden: Increased investment in green infrastructure and clean energy will require higher levels of borrowing, impacting countries' credit profiles and global economic growth. Our Global Bonds expert discusses implications for sovereign debt.
• Economic disruption: Carbon abatement policies and supply bottlenecks can raise energy costs and inflation, and result in reduced consumer spending power and unemployment. We share our thoughts on the initial stages of the green transition in equity markets.
• Capital misallocation risks emerge from investing in unproven clean technologies or companies with a weak carbon reduction track record. Our investment managers share opportunities in the energy transition and the clean energy supply chain - read the full report for details.

Climate crunch: a closer look at the transition risks of net zero

Unconstrained credit strategies' secret sauce

Unconstrained or flexible credit strategies are not tied to a particular index, nor limited in the instruments, duration and types of position they can take, allowing them to deliver returns that have a low correlation with traditional fixed income or with equities. We reveal the tactics that these strategies can use to generate excess returns.

Demystifying unconstrained fixed income

And finally, uncover the inner workings of Quest, our quantitative team, and explore their philosophy, background, and cutting-edge research aimed at generating sustainable returns. Quant strategies: leveraging the power of data & technology

Some more reading:

Monthly views: US stocks have more to give

China stimulates, which emerging countries win?

Renewable natural gas: turning trash into low-carbon energy

Watch: Investing across the entire value chain of AI

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