Perspectives Blog

Implications of a stronger U.S. dollar

Matthew Cobon, Head of Government and FX Investments, Fixed Income, Threadneedle Int'l Ltd | October 27, 2014

…l, but there is a short-term case as to why dollar strength could be accompanied by more asset class volatility. Currency markets are moving ahead of what interest rate markets are telling us, so there is a disconnect. Things could become very challenging for the Fed if the U.S. starts importing deflation from elsewhere. The asset class volatility argument is related to global liquidity being withdrawn and the dollar (as a reserve currency) takin…

2015 Outlook — Same song, slightly different arrangement

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

…eve that markets can withstand a gradual appreciation of the U.S. dollar, but a concentrated and intense move in currency markets represents one of the key market risks for 2015. This tension between the tailwind that global monetary policy brings to asset prices and the potential headwind of currency volatility complicates the investment strategy challenge for 2015. While valuation strongly suggests an equity-dominated portfolio strategy, a port…

Global asset allocation outlook (September 2014)

Columbia Management Global Asset Allocation Team, | October 6, 2014

…elivered by the very assets that have shown historically high sensitivity to dollar strength. This disruption to currency stability in general, and the particular importance of a rise in exchange value for the world’s reserve currency, represents an important change in capital market conditions. It is difficult to say, of course, whether the adjustment in the dollar, and its subsequent effect on asset prices, has run its course. However, we are e…

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…

Asia’s emerging markets – Room to run

Dara White, Senior Portfolio Manager | November 10, 2014

As emerging markets investors, we like Asia because of its strong reform momentum and the depth of its stock market. Rising interest rates will be good for exports and Asia’s earnings story. Valuations, inflation rates and current accounts are at levels close to where they were from 2001 to 2005, the best period for emerging markets. Excerpted from Barron’s November 3, 2014 cover story in which Dara White and three other EM experts discuss opp…

Special report – Commodity markets outlook

Columbia Management, Investment Team | July 21, 2014

In the following Q&A, David Donora, Head of Commodities for Threadneedle Investments, addresses some of the key concerns currently facing investors in commodity markets, and explains his view of the outlook for the market. What is your outlook for commodities for the remainder of 2014? We are bullish on the macro outlook for the rest of 2014. The OECD countries and in particular North America, the region where economic growth is currently th…

Global market mid-year outlook

Mark Burgess, Chief Investment Officer, Threadneedle Investments | June 16, 2014

Overall macroeconomic picture in U.S. should push bond yields higher, particularly if the Fed stops its QE program later this year. We remain positive on emerging market debt while maintaining a bias against emerging market equities. Overall equity markets have been strong and current index levels suggest that investors still have confidence in the outlook for profits. Global equities and global bonds made progress in May with the former outpa…