Outlook 2022: Flying at a Lower Altitude
As we peer over the horizon, we anticipate growth will return to a lower altitude. Read more in our compilation of investment views for 2022.
December 2021
Insights
Global Equity Performance Exceeds That of High-Quality Bonds
Global equities have returned more to investors than high-quality global bonds in nearly three quarters of the last 30 years. The margin of outperformance during those years has been considerable, averaging 12.5 percentage points. That high historical success rate, along with our view that healthy economic activity will support both positive earnings growth and risk appetite, leads us to expect that equities will yet again outperform high-quality bonds.
December 2021
China A-Shares Outperform Global Equities
China’s equity markets have lagged global equities sharply thus far in 2021 in the face of a regulatory crackdown. We expect Chinese equities, particularly China onshore A-shares, to outperform global equities in 2022.
December 2021
Don’t Expect EM ex China Performance to Impress
Emerging markets ex China equities have underperformed their DM peers this year due, in part, to greater economic and political challenges, which have weighed on sentiment toward the bloc. We expect these issues to persist into next year and are skeptical that EM ex China equities can outperform DM equivalents.
December 2021
Interest in Private Investments Continues to Expand
Investors with mature private investment programs tend to have private exposure to major developed markets, such as the United States and Europe. While many of these investors have added Chinese exposure to their private programs over the last decade, interest has recently increased in less-trafficked Asian markets and more specialized European strategies. We expect this interest will continue to expand next year.
December 2021
Many Real Estate Assets Will Be Boosted by Secular Tailwinds
We believe a healthy macro backdrop and strong demand for inflation-sensitive assets will support most real estate assets in 2022. However, given stretched valuations for many core assets and COVID-19–related uncertainty around some sectors, we think return prospects are highest for assets that benefit from secular trends, such as the growing demand for healthcare and broadband.
December 2021
Allocations to 21st-Century Infrastructure Increase
The infrastructure market has evolved since the financial crisis. Almost a majority of current investing is now in “21st-century infrastructure,” which includes digital and renewable assets. Given the expected importance of both sectors to future growth, we anticipate that investors will commit greater amounts of capital to each in 2022.
December 2021
Expect Lackluster Returns on Most Liquid Credits
Low yields on many liquid credit assets curbed returns in 2021, a trend that seems likely to continue in 2022.
December 2021