Insights

Investors return expectations with multi-asset portfolios are high. Achieving them going forward calls for rethinking the investment approach, especially in terms of diversification, asset allocation, and a system to get rid of emotional biases.

It takes two to tango on the dance floor as well as the world stage. While Donald Trump and Xi Jinping seem ready to jump at each other’s throats, a constructive geopolitical dialogue, perhaps after a Joe Biden win, could free us from trade war fears.

The weeks leading up to the US elections are likely to be volatile. A “Democratic sweep” would have the most negative impact on risky assets but benefit utilities and renewable energy companies, whereas a Trump win would trigger an equity relief rally and further benefit Big Tech, healthcare and communication services firms.

Many investors remain caught between the COVID-19 pandemic and the monetary and fiscal policy stimulus packages. This is exacerbated by uncertainties such as the negotiations between the UK and the European Union and the upcoming presidential election in the US. Find out how our models are positioned in this environment.

Our summer holidays haven’t eased worries about a resurging pandemic, but the horror of the first wave and the ensuing lockdowns is gone. Financial markets have rebounded and battered economies have regained their footing. There are even hopes that Covid-19 may help bring about a “green recovery”.

A key factor in assessing the fundamental economic market environment at the start of September is the change in US interest policy: a reformulated inflation target. Against the backdrop of further economic support from central banks, our models take a short position in bonds and remain overweighted on equities, albeit to a lesser extent.

Gold's gain has been the US dollar's pain as currency debasement fears abound. While the US dollar will not lose its world reserve currency status anytime soon, a US defeat in the tech war with China might push it over the edge. That is, if the yuan is up for the challenge to replace the US dollar.

Investors’ risk appetite changed over the course of July with our risk indicator in green territory for the first time since June 2019. We continue to overweight equities, but to a lesser extent. Gold still shines.

Precious and industrial metals are on a winning streak. Gold could reach 2200 US dollars by the end of this year and the silver rally is far from running out of steam. There are four reasons for this.