Perspectives Blog

The end of “risk-on/risk-off”

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

…nagers. After 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…

Global Asset Allocation Outlook (as of February 24, 2014)

Columbia Management Global Asset Allocation Team, | March 10, 2014

Markets had a difficult start to the year. After experiencing negative returns in January, both U.S. and European equities recovered in February and are now slightly positive for the year. The best returns have come from U.S. small-cap equities along with shares of equities domiciled in the periphery of Europe. These two broad groups are both up mid-single digits. Emerging market equities continue to lag developed market performance. And, Japane…

European equities – Should investors care about periphery vs. core anymore?

Dan Ison, Portfolio Manager | January 13, 2014

The more dramatic the economic reforms, the better the stock market performance in the eurozone We expect nominal growth to be the key driver of an improving earnings picture in Europe European equities should show further good returns to investors in 2014 As we enter 2014 there are the usual questions, conversations and strategy pieces extolling the virtues of different regions and asset classes. 2013 saw a phoenix-like resurgence in interest…

Global asset allocation outlook (as of March 2014)

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

After significant gains in 2013, equities took a breather in the first quarter of 2014 while fixed income assets rallied. The S&P 500 Index experienced a fair amount of volatility, retreating 5.8% at the start of the year and then rallying by more than 7% to end the quarter modestly higher. Within international markets, European, emerging markets (EM) and Japanese equities lagged U.S. equities. By the end of the quarter, however, risk assets…

An improving outlook for European equities

Philip Dicken, Head of European Equities, Threadneedle International Ltd | October 18, 2013

…and M&A activity, further supporting economic activity. Exhibit 2: Western European M&A activity Source: Datastream Valuations remain attractive Whilst we are some way off the rock bottom valuations of 2009, European equities have lagged the U.S. and UK and also look cheap compared to history. Only a few months ago the eurozone was in meltdown. Bond spreads were widening, the political environment appeared fragile and earnings estimates…

January asset allocation update

Jeffrey Knight, CFA, Head of Global Asset Allocation | February 3, 2014

As we assess the global markets in early 2014, our overall portfolio strategy remains modestly overweight equities and underweight fixed income. While we have been anticipating an increase in volatility, we still believe equities will outperform bonds over the course of the year. The current low level of interest rates suggests returns from bonds remain unattractive on a longer term strategic basis. Real returns are likely to be low to potential…

Big picture supports allocating risk to equities

Jeffrey Knight, CFA, Head of Global Asset Allocation | October 25, 2013

In the current environment, focusing portfolio risk on equities is a sensible approach. Given policy uncertainties in the U.S., we think it’s time to incorporate more international diversification. Fixed income markets are once again relevant in the search for diversification, along with unconventional diversifiers like absolute return funds. Watch: Investment Strategy Outlook Q4 2013 See more Market Insights from Columbia Management…