Perspectives Blog

ECB asset purchases — Bazooka or damp squib?

Martin Harvey, Fund Manager, Threadneedle International Ltd | September 22, 2014

With inflation expectations declining to the levels that preceded the recent shift in policy, should the ECB and the financial markets be worried? In our view, the ECB probably won’t be wholly impressed by the reaction of inflation expectations to recently announced measures, and will be keeping a close eye on favored measures. We believe that we would need to see a further significant deterioration in growth and inflation expectations to kick…

Is Europe heading for Japanese-style deflation?

Martin Harvey, Fund Manager, Threadneedle International Ltd | August 4, 2014

Although there are many differences that should ensure that the eurozone does not follow Japan‘s fate, policymakers will need to act forcefully if the risk of deflation intensifies. While the euro area appears to be on track to avert deflation in the short term, many euro countries are “one crisis away from deflation.” The European Central Bank (ECB) claims to be ahead of the game, but policy needs to be more pro-active. The following is an ex…

Building better portfolios in a low return world

Anwiti Bahuguna, Ph.D., Senior Portfolio Manager | November 17, 2014

The near-zero interest rate environment has been a support for the financial markets, but as the economy normalizes so will interest rates. While we expect the bull market in equities to continue, returns will likely be far more modest over the next 10 years. For bonds we can expect returns in the range of 2%-3% going forward. For investors looking for higher returns, solutions require a non-traditional approach to portfolio construction and mu…