Perspectives Blog

Emerging Markets: Waiting on exports

Anwiti Bahuguna, Ph.D., Senior Portfolio Manager | March 31, 2014

…orld is recovering, but it has been a weak recovery. U.S. growth has not broken out of the 2%-3% range, the eurozone is no longer contracting but expectations are for growth of only about 1%, and there are questions regarding Japan’s ability to sustain any growth rebound with the advent of the new consumption tax. Global growth has simply not been strong enough to support high demand for EM exports. The question is whether a continuing gradual re…

When the QE tide recedes, focus on what is revealed

Robert McConnaughey, Director of Global Research | January 6, 2014

…and the foot-draggers such as France. However, unlike the U.S., aggregate profit margins are well below prior peaks and valuations remain fairly forgiving, leaving room for upside against that backdrop of lower expectations. Japan, having suffered through almost two decades of malaise, has reasserted itself on the global stage with the bold economic policies that have become known as “Abenomics.” Abenomics has been described as having “three arr…

Asset allocation – Kinetic vs. potential energy

Columbia Management Global Asset Allocation Team, | August 4, 2014

While most equity markets had positive first half performance, we still expect modest acceleration in growth ahead for the global economy. From both a valuation perspective and investor sentiment viewpoint, Chinese, Russian and Japanese equities look cheap. Europe appears vulnerable to shifting sentiment in addition to further downward revisions to profit expectations. In our latest Investment Strategy Outlook we discuss kinetic energy vs. pot…

Q2 fixed income outlook – Hitting for the cycle

Gene Tannuzzo, CFA, Senior Portfolio Manager | March 31, 2014

…rtunities for bond investors in the non-agency mortgage market, as well as in certain corporate industries. Internationally, growth has generally lagged the U.S. However, we are now starting to see better growth in Europe and Japan which we expect to broaden to emerging markets as well. Following weakness last year, emerging market debt has posted gains this year, and we expect further strength ahead as volatility subsides. The monetary policy cy…

The end of “risk-on/risk-off”

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

…he peak reached in 2011 to more normal levels, it makes active strategies potentially more attractive. Second, cross-regional correlations have fallen due to the divergence in performance of DM equities (particularly U.S. and Japan) and EM equities. Recent growth worries in EM have led to significant underperformance in a period where most DM are stabilizing. Identifying structurally sound countries has always been an important component of succe…

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…

Ukraine Crisis – Can the U.S. make Europe less dependent on Russian gas?

Jonathan Mogil, Portfolio Manager and Senior Analyst | July 28, 2014

…G imports. Europe has enough spare capacity at its LNG terminals to source supply from Asia which could mitigate the issue temporarily, but this would not be an ideal long-term solution as they would be forced to compete with Japan and other Asian buyers who have traditionally been willing to pay higher prices linked to the price of oil. Can the U.S. mitigate a gas shortage in Europe? Since the conflict began earlier this year, there have been ca…