London, Wednesday 1st April 2015
Finding returns in a divergent world- research conference call
Source hosted Paul Jackson, Managing Director and Head of Multi-Asset Research at Source, as he discusses the outlook for a broad range of asset classes
Call highlights:
- What has changed? Reduced real estate (now Neutral), reduced government bonds mostly in the Eurozone (still Underweight), increase cash (returns certain).
- Last 1y and 5y – equity-like assets outperformed, commodities lagged, it is still the case year-to-date.
- Global economy in moderate growth, central bank policies supportive of markets. Currently in period of low inflation rather than explicit deflation although government bond yields lower than periods of deflation.
- QE5 aggregate assets expected to grow, but from different sources (BOJ, ECB). - Central bank expansion supportive of equities, could benefit Eurozone and Japan.
- Valuations also supportive of equity-like assets, they also have more attractive yields compared to fixed income.
- Central bank action keeps government bond yields low.
Fed policy is extreme in a historical context – asset purchases represent an equivalent of a further 5% decrease in rates when viewing QE in interest rate terms.
- High yield starting yields more than compensate for expected capital losses in the next 5 years. High yield also offers attractive historic risk / expected return characteristics versus other asset classes.
The call was hosted by:
Michael John Lytle, Chief Development Officer, Source
For a copy of the webinar replay, please email events@source.info.
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