Perspectives Blog

Should investors be cheering Japan’s new stimulus program?

Daisuke Nomoto, Senior Portfolio Manager | November 3, 2014

…f 2015 (QQE stands for Quantitative and Qualitative Easing, and this new expanded program is being dubbed QQE2). BOJ’s balance sheet will expand to roughly ¥380 trillion, or 75% of Japan’s GDP. So the magnitude of easing is unprecedented and a BOJ contact we spoke with emphasized that this is an open-end process. If any downside risks to inflation materialize, the BOJ will act promptly to maintain inflation expectations. BOJ’s move should help fu…

Does Japan’s sell-off present buying opportunities?

Daisuke Nomoto, Senior Portfolio Manager | February 10, 2014

What’s behind the Japanese stock market’s recent correction? What’s ahead for Japan’s stock market, currency and government policy? Why the risk/reward tradeoff looks attractive at current price levels Abenomics has already had a bigger impact on the Japanese economy and financial assets than the failed attempt at quantitative easing between 2001 and 2006 (see chart). Inflation has moved back into positive territory, and household income is ri…

Asset allocation: Q4 equity strategy

Columbia Management Global Asset Allocation Team, | October 27, 2014

After the recent correction and with the breadth of our asset allocation research still favoring equities, we are rebuilding an equity overweight, primarily using U.S. large-cap stocks. While the Fed heads toward the exit, the European Central Bank is planning to provide further monetary easing and the Bank of Japan is continuing to expand its balance sheet. We are neutral on the eurozone, overweight Japan, neutral on overall EM equities favori…

Interest rates — Farewell, liquidity trap

Zach Pandl, Portfolio Manager and Strategist | December 15, 2014

The U.S. Treasury market as a whole has returned +1% annualized since the end of 2012 (and +0.5% annualized since the low in 10-year yields in July 2012). Because of imminent Fed rate hikes and depressed yield levels, prospective returns look no better today. We recommend investors take profit in long-duration ­fixed-income sectors that benefited from 2014’s decline in rates, and look to other sources of income for their bond portfolios. With…

2015 Outlook — Same song, slightly different arrangement

Jeffrey Knight, CFA, Global Head of Investment Solutions and Asset Allocation | December 15, 2014

We are as convinced as ever that equities have a significant advantage over other asset classes based on valuation. Managing the risk of simultaneous drawdown across asset classes requires a process to actively de-risk portfolios and a methodology for diagnosing the conditions to trigger such a step. To manage risk and stabilize portfolio values in case equities do not perform well, we favor non-traditional diversifiers, explicit downside hedge…