“Multi-asset investing may help access attractive bond yields while also exploring opportunities from a resilient economic outlook, in particular in European equities.”
- Slowing inflation, expectations of interest rate cuts and tech exuberance led the index to touch all time highs.
- In Europe, recent data points to better-than-expected growth, but uncertainty remains high.
- Hence, a multi-asset approach could help investors benefit from the positive economic backdrop and stay balanced.
The Bloomberg Eurozone index of equal allocation to fixed income and equities reached its all-time high last week. It also recovered previous losses experienced in the challenging period of high inflation and economic difficulties in 2022. With YTD returns of above 5%, this index outperformed a similar US strategy.
Going forward Europe may benefit from improving growth prospects and slowing inflation, which could allow the ECB to cut rates. But uncertainty around monetary policy mistakes and economic growth remain. In addition, escalating tensions in the Middle East, resulting in higher oil prices (not our base case), may hamper ECB efforts. Thus, a balanced approach may help identify attractive opportunities across asset classes.
You can now read the full whitepaper at the link below
