Perspectives Blog

Special report – 2014 mid-year review and outlook

Columbia Management, Investment Team | June 16, 2014

Key investment professionals review the first half of 2014 and share their insights into what may be ahead for the second half of the year. Interest rates Zach Pandl, Portfolio manager and strategist Review: Government bond yields declined in early 2014, both in the U.S. and in other developed market economies. This surprising change in course after increases in 2013 caught many investors off guard. In our view, declining interest rates reflect…

Emerging Markets: Waiting on exports

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

…ies are not alone in facing concerns about sluggish exports. Signs of weak global demand are also evident in the Japanese trade data. Despite over 20% devaluation of the yen in 2013, export growth in Japan has been at best modest while their trade balance has deteriorated due to increased cost of imports. A strategy of devaluation-led export growth works only in an environment of strong global demand, one that has yet to materialize in this cycle…

Global asset allocation outlook (August 2014)

Columbia Management Global Asset Allocation Team, | September 8, 2014

…ntral Bank to go back to the drawing board and reexamine the extent of monetary accommodation provided thus far. Japanese equities had a spectacular rise in 2013 and positive earnings revisions had pointed to a fundamental reason to be overweight Japan. Additional support from policies collectively known as Abenomics was expected to provide further support to the Japanese economy. So far this year, the third set of reforms has been disappointing….

When the QE tide recedes, focus on what is revealed

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

…aks 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 arrows”: 1) aggressive monetary easing, 2) fiscal stimulus and 3) structural reforms. Japanese markets responded ext…

Asset allocation – Kinetic vs. potential energy

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

…ets have built up a sizeable reserve of potential energy, which make them candidates for a second half recovery. Japan is one area where we believe the market participants have been exceedingly negative for a long time given its long period of underperformance. Expectations of equity market disappointment are engraved in the investor psyche. Both valuation and our fundamental research point to strong earnings for Japanese companies this year, and…

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…

Q2 fixed income outlook – Hitting for the cycle

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

We have started to reduce exposure to high-quality bonds with limited upside potential and high-yield bonds in which credit risk appears too aggressive. Following weakness last year, emerging market debt has posted gains this year, and we expect further strength ahead as volatility subsides. While we expect a flatter yield curve over the next few months as investors focus on the timing and pace of rate increases, we don’t think they should avoi…