19 January 2017: Uncovering opportunities
–The threat that the US and UK will back away from globalization has been a focal point at the World Economic Forum discussions at Davos. This could present opportunities as well as risks for investors.
–CIO is adding an overweight position in global equities relative to government bonds in recognition of continued global growth, central bank support, and an improving earnings outlook in many parts of the world.
–Along with our overweight in US equities, we are introducing an overweight position in US high yield credit. Improving business conditions and the recent rise in the oil price have reduced the risk of defaults.
–We are closing our underweight position in Swiss equities versus EM stocks. Swiss financial stocks are benefiting from higher global interest rate expectations.