No, we do not expect Japanese mid-/large-cap equities to outperform their global peers despite some supportive factors, such as Tokyo Stock Exchange (TSE) reforms and inflows from security investment schemes. Japanese equities tend to underperform in global activity slowdowns and contractions, and current valuations do not offer sufficient compensation to bear that risk, given our […]
October 2024
Introduction Aaron Costello, Regional Head for Asia, and Vivian Gan, Associate Investment Director, Capital Markets Research With the global economy showing signs of cooling and Chinese economic momentum remaining weak, the outlook for Asian markets is increasingly mixed. Certain markets have been more resilient, such as India, where domestic growth is still robust, and Taiwan, […]
September 2024
Yes, investors should diversify in a risk-controlled manner, as mega-cap tech stocks have delivered exceptional fundamentals but are expensive and represent an outsized share of the equity markets. Investors should diversify concentration risk by leaning into more attractively valued segments of the market, namely developed markets small-cap and value stocks. Over the last 15 years, […]
September 2024
The Federal Reserve has reduced the target range for the federal funds rate by 50 basis points (bps) to 4.75%–5.00%, the first reduction in over four years. This decision, while anticipated, marks a pivotal shift in monetary policy. The Fed also released updated economic projections, which highlighted it expects to reduce interest rates by a […]
September 2024
Yes, we believe that private investment in climate solutions would continue apace in a second Trump administration, given strong demand for clean energy, supportive and resilient US government policies, and robust investment opportunities that will continue to be attractive to many investors. Long-term capital flows into climate solutions reflect market-driven structural tailwinds. The drivers of […]
September 2024
In our 2023 ‘From Policy to Implementation: A Net Zero Playbook for Investors’, we laid out why and how an investor might incorporate climate goals into their portfolio without compromising its financial goals. Subsequent experience has shown us new ways to streamline the process, as investors often get bogged down in reporting and activities that […]
September 2024
Markets have been jittery as the US presidential election approaches. The macro backdrop is shifting, with slowing economic growth and ebbing inflation meaning a cycle of monetary easing beckons. At the same time, elevated valuations for a variety of assets are causing investors to reconsider narratives around themes, such as AI investment, and consider asset […]
September 2024
When investors doubt prevailing narratives, volatility tends to increase, with pricey and leveraged markets most at risk. This was the setting in July and early August as cracks formed in the narratives around artificial intelligence (AI) growth and an economic soft landing. The loss in faith amid high valuations amplified the decline as the Japanese […]
September 2024