Perspectives Blog

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…

January asset allocation update

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

…d find better valuations in select markets abroad. While short-term valuations have run up recently, we continue to favor both the UK and eurozone on better economic momentum. In addition, we maintain our strong overweight to Japan as we see both favorable monetary and macro conditions continuing. EM equities present a challenge. While global liquidity and valuations are supportive of the asset class, sentiment remains negative and after many yea…

What to make of the rebound in emerging market equities

Dara White, Senior Portfolio Manager | April 14, 2014

…) is recovering, but it has been an anemic 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 introduction of the new consumption tax. So EM growth hinges partly on a sustained global pickup which is yet to materialize. The other big catalyst for sustained outper…

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…

Asset allocation November 2013

Jeffrey Knight, CFA, Global Head of Investment Solutions and Asset Allocation | December 12, 2013

…upside). Better opportunities in select international equities. 3. Continue to favor UK and eurozone on better economic momentum; short-term valuations have run up a bit but still supportive longer term. 4. Continue to favor Japan on favorable monetary and macro conditions; earnings momentum has waned of late. 5. Downgrade EM equities to neutral; while global liquidity is high as U.S. monetary conditions are supportive in the short term; valuati…