Asset Allocation

In our economic and market scenarios, the next stage points to lower growth and gradually lower inflation in the US by the end of 2024. Consequently, lower interest rates should follow, and we keep a long duration bias in fixed income. We expect a soft landing and are buyers of Investment grade credit and Emerging market debt since the carry is attractive in this outcome. Regarding equities, we keep a neutral stance considering the limited upside potential as several uncertainties weigh on the outlook. If risks to the outlook materialise or markets become too complacent, we would stand ready to reduce exposure.

With the upcoming 2023 Turkish presidential election, scheduled to take place on 14 May, we are sharing our views and sentiments on the possible outcomes and their consequences.

Our main scenario incorporates slow growth, both in the US and eurozone, and continues to remain the most likely.

El endurecimiento monetario de la Reserva Federal de Estados Unidos (Fed) en los últimos doce meses, único en su género, ha generado vulnerabilidades financieras.

Uncertainties on US and European financials have replaced the better economic growth outlook in investor’s minds. Suddenly, the improvement in activity is now mitigated by financial vulnerabilities and inflation stickiness.

Portfolios managed by Candriam have no exposure to any Credit Suisse security, OTC exposure or stock-lending exposure.

The better outlook on the growth/inflation mix for the year ahead has quickly been incorporated by risky assets, from equities to high yield via credit markets. As the extreme investor pessimism of last October is now in the distant past, we are reducing our overall equity allocation to a more neutral stance.

We have started 2023 with a preference for equities over bonds, as our investment strategy turned more constructive on attractive price levels in October.

We end 2022 with a preference for equities over bonds, as our investment strategy became more constructive on attractive price levels at the start of the fourth quarter.

In October, we turned more constructive based on our analysis of the market configuration. This month, fundamental support provides further reasons to maintain this stance.

Si la sonrisa mide cómo reacciona el valor de la cartera a los cambios en los mercados subyacentes, tal vez deberíamos medir la sonrisa, y esto es lo que nuestro equipo de inversión ha estado haciendo.

Short-term interest rates have been rising around the world over the past year as central banks attempt to fight inflation.

While inflation continues to surprise to the upside, growth dynamics have turned and continue to decelerate. Growth concerns are mainly affecting Europe, as energy prices remain an important inflation driver, while central banks are stepping up their tightening.

Despite this wealth of information – or perhaps because of too much information? – maybe you are still uncertain.  We can help you organize and develop your views, in a 20-minute video. Our economists and strategists will try to clarify the economic and financial risks.

As 2022 opened, we all thought of Covid, war, oil prices, transient inflation... What do you see on the horizon now? Wheat supply crisis? Quantitative tightening? Sustained inflation?

This year’s European summer heatwave and drought has the potential to worsen the current energy crisis, as river water levels have dropped significantly.

Ahora que hemos llegado a mitad de año, las previsiones de crecimiento mundial siguen revisándose a la baja y los obstáculos siguen siendo notorios...

The multiple shocks experienced so far in 2022 have led to a rare simultaneous decline in equity and bond values. As uncomfortably high inflation leads major central banks to tighten monetary policies, investors are preparing for the landing of the global economy.

The reasons for a prudent allocation have not changed in recent weeks: facing high inflation, central bank rhetoric and policy tools have triggered a tightening in financial conditions while the global economic slowdown is now well underway, as the war in Ukraine and Covid-related lockdowns in China weigh on confidence and activity.

A medida que la pandemia de COVID-19 retrocedía, China disfrutaba de una sólida recuperación impulsada por el cambio en el consumo de las economías desarrolladas desde los servicios hacia los productos manufactureros, muchos de ellos procedentes de China.

Exiting the pandemic, entering the war and tightening monetary policies around the globe are acting together as a formidable business cycle accelerator.

As recently as the beginning of February, a total invasion still seemed unlikely. Since then, we have chosen to position for a potentially binary outcome, and have increased exposure to gold, the USD, the YEN, and the CHF, as well as to some commodities such as oil, while cutting our exposure to financials, reducing our equity exposure, and adding protection.

The Russian economy is likely to be severely impacted by the sanctions.

The war in Ukraine has added new uncertainties for investors

On the heels of Covid-19 and the oil shock, financial markets experienced a third blow yesterday (12 March) with a major confidence crisis. Speeches from US President Donald Trump and ECB President Christine Lagarde have shaken investor confidence in the ability to lead a timely and bold approach worldwide.