The new EU taxonomy defining what is truly 'sustainable' will offer essential clarity and help counteract greenwashing. We also review the implications for investors of Chinese bonds becoming more prominent in global benchmarks. Elsewhere in Asia Pacific, we assess the state of investment stewardship. Finally, we note that Goldilocks may currently prevail on the economic scene, but her grip on the throne is tenuous at best.
In this edition, read why ‘globotics’, the next stage of globalisation, threatens to overwhelm our capacity to adapt. We also explain what the energy transition means for equity valuations and present our asset allocation for the second quarter.
The science is unequivocal and the evidence is growing ever stronger, supporting the rationale of adopting a long-term investment focus on sustainability. We present our Global Sustainability Strategy. Also in this issue: do not apply a one-size-fits-all approach to BBB rated debt, but assess the idiosyncrasies; and the outlook for European equities.
In a world striving for greater sustainability, investment in coal – be it mining or power generation – should be much more selective, hence our new coal investment policy. Also in this issue: how to navigate markets as they swing between the impact of news on the fundamentals and adjustments in central bank liquidity; what to make of the trends in US inflation; and our assessment of the relations and economies of China and the US.
An explanation on why China wants a trade deal and how the US feels about this
In a fast changing world, our focus is on achieving long-term sustainable investment returns for our clients.
Factor investing strategies can maximise portfolio returns while reducing risk. Adding ESG objectives to such strategies adds sustainable investing as a third dimension in addition to the return and the risk.
US companies’ earnings growth following the Q4 2018 sell-off could slow to the point of an ‘earnings recession’. But – outside energy and tech – the outlook may not be as bleak as it first appears.
With the structural direction of equities unclear, we prefer to be neutral in the medium to long term. We are structurally underweight in fixed income as we foresee gradually rising inflation and further monetary policy normalisation.
Tighter financial conditions, persistent political risk and slowing earnings growth are among the many factors set to inform fixed income choices, with careful security picking likely to matter more to performance than it did in 2018.