Reviews & outlooks

In the continuing tale of recessions, the three scenarios of no landing, hard landing, and soft landing call for finding just the right temperature, much like Goldilocks finally discovering the third bowl of the three bears’ porridge, which was neither too hot nor too cold, but just right. Which one would be the best outcome for investors? Read more in the latest Investors’ Outlook.

Markets experienced a setback in August 2023 as rate expectations for 2024 and 2025 rose, driven by reduced recession risks and inflation worries from fiscal stimulus and debt. Concerns about contagion from Chinese real estate developers in the banking system seem exaggerated. Our models remain constructive on equities.

For now the much-feared recession has been staved off thanks to a resilient consumer. However, the risk is not off the table yet which has prompted our models to take a small step back from maximum equity allocations. While they stay optimistic, they have now started to treat the asset class with a grain of salt while bonds don’t seem to be able to find their way out of the dog’s house.

Luc D’hooge and Wouter Van Overfelt review the developments of the Vontobel Fund – Emerging Markets Debt and Vontobel Fund – Emerging Markets Corporate Bond and share their forecast for the remainder of 2023.

What comes after the US Federal Reserve’s pause in rate hikes? Our Multi Asset Boutique takes a “time out” to review the first half of 2023 and provides an overview of what investors might expect in the remaining six months, with the continued spotlight on central banks, inflation’s path, and the ongoing debate around a US recession.

Nothing seems to be able to derail equities on their way up, despite risk factors such as the US debt ceiling or the surprisingly hawkish Fed communiqué in June. A major reason for the calm is the continuously surprising resilience of the consumer, which still argues for an equity overweight.

While the impact of tighter monetary policy has started to seep into the real economy and it’s clear it won’t leave it unscathed, adjusting the lens also shows us a positive side of the coin. Our Multi Asset Boutique balances the details and the big picture, along with the accentuating highlights painted by the brushstrokes out of China and emerging markets. Find out what they see.

Markets keep ignoring the economic deterioration in the US, as first cracks in the US banking system increase the likelihood of a Fed pivot over the upcoming months. At the same time Chinese recovery boosts the growth outlook for the APAC region. While growth perspectives and sentiment seem to diverge, our models stick to their equity overweight.

Wouter Van Overfelt, Head of Emerging Market Corporates and Luc D’hooge, Head of Emerging Markets Bonds, provide a review on the developments in the first quarter, the current positioning of the strategies as well as an outlook for the remainder of 2023.