Perspectives Blog

It’s a mobile world

Dave Egan, Senior Equity Analyst | March 10, 2014

…mple, while the high-end is decelerating, the low-end in China and the emerging markets continue to see strong growth. As consumers in these areas trade up from voice-only feature phones to 3G/4G data-centric smartphones, the dollar amount of components per phone continues to rise. For example, radio frequency (RF) components in 2G voice phones is < $1; RF components in an emerging markets long-term evolution (LTE) smartphone can be as much as…

Global market mid-year outlook

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

…x rose 2.34% in total return terms while the JP Morgan Global Government Bond index returned 0.87%. Commodities, which prior to May had performed very robustly, lost some ground as the Dow Jones-UBS Commodity index produced a dollar total return of -2.87%. Nonetheless, returns from the asset class remain well into positive territory for 2014 to date. Looking forward, we believe that there are three questions that investors have to consider over t…

The role of income inequality

March 3, 2014

…everaging is largely complete, income inequality can continue to rise in the U.S. and consumption remain depressed because wealthier households typically save a greater share of income and have a lower propensity to spend per dollar of income. In addition, permanently tighter lending standards have left many households unable to access credit or unwilling to do so. So it is both a demand and a supply story as it relates to credit. But the main po…

U.S. rates — Data dependence

Zach Pandl, Portfolio Manager and Strategist | June 23, 2014

…FOMC meeting contained a little bit for everyone and interest rates reacted only marginally after the announcements. But looking across asset markets—including nominal and inflation-linked bonds, equities, commodities and the dollar—it’s clear that investors interpreted the news as another dovish surprise from the Fed. We are not sure that is the correct interpretation, and the reason comes down to the issue of “data dependence”. The FOMC’s forec…

FOMC December meeting scouting report

Zach Pandl, Portfolio Manager and Strategist | December 16, 2013

…ed acceleration in U.S. activity. Second, U.S. financial conditions look less worrisome than in September. Although interest rates have remained high, stock prices have increased further, credit spreads have narrowed, and the dollar has weakened against most developed market currencies. Third, fiscal uncertainty has come down meaningfully. Although the budget battles in October proved very noisy, congressional negotiators ultimately found enough…

Constraints of convention – Does a portfolio design have to be static?

Jeffrey Knight, CFA, Global Head of Investment Solutions and Asset Allocation | July 14, 2014

…te amount of the risk. In order to address this equity concentration, risk parity emerged and introduced two significant breakthroughs. First, determining portfolio allocations based upon risk contributions rather than simple dollar allocations. In doing so, risk parity under-emphasized equity and placed a higher reliance on bonds, which has been useful in an environment where interest rates have been falling for many years. The second breakthrou…

Should investors care about valuation?

Rich Rosen, Portfolio Manager | November 25, 2013

…etermining whether it is a good time to invest in stocks? What does valuation mean anyway? The most common measure of valuation starts by looking at the market’s P/E, or how much investors are presently willing to pay for one dollar’s worth of future earnings. Using prior cycles as a benchmark for what the norm should be, you can then conclude whether the market is cheap or expensive. Looking at the market based on valuation: How helpful is it? W…