Investors are facing unprecedented challenges in today's global markets. Finding answers can be hard. We have identified a few key investment themes and matched our investment solutions around each, helping you to meet your investment challenges.
Toward normalization – the uneven path to growth
July 2016 marked an inflection point from deflation to reflation. Bond yields started to rise on a brighter growth outlook. We expect global inflation, led by the US, to increase very gradually. In our view, the expected rise in US policy rates is likely to be the most modest and gradual normalization in the history of the Federal Reserve. However, the path to growth is likely to be uneven due to various risks, particularly the balancing act which will be necessary to exit successfully from ultra-accommodative monetary policy.
Low yields have presented a significant challenge to investors for a number of years. We see a moderate US-led reflation which is slow and expect inflation and interest rates to reach levels well below the average of past recovery peaks. While global growth is likely to pick up, yields are still at low or negative levels and we expect them to stay low in Europe and Japan in the foreseeable future.
Sustainable and impact investing
Focused sustainable investing consists of three distinct approaches that can be used individually or in combination when building portfolios: 1) exclusion of objectionable investments, 2) integration of environmental, social and governance (ESG) factors with traditional finance considerations to make investment decisions, and 3) impact investing.