Perspectives Blog

The end of “risk-on/risk-off”

Anwiti Bahuguna, Ph.D., Senior Portfolio Manager | February 3, 2014

…the financial crisis, cross-asset correlations rose sharply as asset prices reacted predominantly to macro factors and less to individual stock or bond characteristics. For example, while the correlation between equities and commodities used to be negative or very low, it rose to over 80% during the crisis years (2008-2011). Correlations between equities in different regions (emerging markets (EM) vs. developed markets (DM)) used to be low, but…

Not all emerging markets are created equal

Robert McConnaughey, Director of Global Research | January 27, 2014

…ng on declining global competitiveness and the limits of operating at razor-thin margins (or even subsidized losses). China’s broad over-capacity and credit challenges have brought an end to their voracious appetite for commodities. The beginning of Federal Reserve tapering has raised concerns about the availability of cheap external financing of growth, particularly for countries in current account deficits. Finally, the commitment to ongo…

Comments on the effect on global markets from the Ukraine crisis

Mark Burgess, Chief Investment Officer, Threadneedle Investments | March 12, 2014

…lthough we expect both the hard and local currency markets to remain volatile in the short term. Emerging equities reflect concerns not only around Russia and Ukraine but also the weaker growth outlook in Brazil and China. In commodities, Russia is a significant oil player, supplying 30% of Europe’s gas, with 50% of that piped through Ukraine. Any move to curb Russian oil exports by the EU could easily drive Brent crude oil into the $140-160 a ba…

Global asset allocation outlook (as of March 2014)

Columbia Management Global Asset Allocation Team, | April 7, 2014

…continued to perform well. Other hybrid bond like assets, such as convertible bonds, REITs and utilities were the best performing assets in the first quarter rising about 5%-7%. In a complete reversal from last year’s trend, commodities also rallied in the first quarter. The U.S. economy experienced a slowdown partly attributed to weather, but also due to softness in housing and payback from a very strong inventory cycle in the second half of 20…

Should your income be fixed?

David King, CFA, Senior Portfolio Manager | December 16, 2013

…ate of return with low risk. If these investments will do that today, this discussion is over; but will they? The event we now call The Great Recession have wrung inflationary expectations out of the global economy. All major commodities, whether gold or oil, cotton or corn, are priced well below their peak levels of recent years. Recipients of government payments linked to inflation are receiving nominal or no increases. Nominal interest rates,…

Asset allocation November 2013

Jeffrey Knight, CFA, Head of Global Asset Allocation | December 12, 2013

…upportive, somewhat stable macro conditions; sentiment remains negative. 6. Downgrade to securitized sector on valuation concerns and potential sell off as tapering begins. Allocated to investment-grade bonds. 7. Downgrade to commodities as supply demand picture remains weak, roll yields have turned negative, ETF sell off continues. Source: Columbia Management Investment Advisers, LLC. Investment Strategy Outlook reflects the views of the Global…

Asset allocation chart December 2013

Jeffrey Knight, CFA, Head of Global Asset Allocation | January 6, 2014

…t sentiment remains negative. We remain underweight to the securitized sector on valuation concerns and potential sell-off as tapering begins. We remain modestly overweight to EM and high-yield bonds. We remain underweight to commodities as the supply-demand picture remains weak, roll yields have turned negative and the ETF sell off continues. Source: Columbia Management Investment Advisers, LLC. Investment Strategy Outlook reflects the views o…