Asset Class Summary Views
Views expressed reflect those of the AXA IM Core CIO team. Traffic lights indicate expected return over a three-to-six-month period relative to long-term trends.
Positive
Neutral
Negative
CIO team views draw on AXA IM Macro Research team and AXA IM investment team views and are not intended as asset allocation advice.
Rates
Short duration still preferred. Long-term yields in trading range.
US Treasuries
Yields in fair value territory.
Euro - Core Govt.
ECB cut interest rates before Fed. Returns to be modest.
Euro - Peripherals
Near-term political uncertainty suggests caution.
Lower inflation should allow interest rate cuts which will help asset class.
UK Gilts
Bank of Japan policy indecision and weak yen make JGBs unattractive.
JGBs
Inflation
Market expects stable inflation over the medium term – five years.
Income assets should be part of portfolios. Low spreads suggest limited excess returns.
Credit
USD Investment Grade
Yields are attractive. Excess return is limited though.
Euro Investment Grade
Supportive macroeconomic environment is helping.
Returns supported, given current yields and expectations of faster interest rate cuts.
GBP Investment Grade
USD High Yield
Fundamentals and funding strength remain strong.
ECB interest rates cut supports returns although politics remains a risk.
Euro High Yield
Volatility has eased but when US interest rates fall it will help recovery.
EM Hard Currency
Growth supports earnings expansion in 2024. Rates cuts in scope to broaden the rally.
Equities
Slowing economic growth is unlikely to damage company earnings.
US
Positive economic surprises, and attractive valuations but political instability a concern.
Europe
Monetary policy and change of government should provide sentiment boost.
UK
Japan
Benefitting from growth in semiconductor industry.
Growth remains unbalanced. Accelerating industrial output, masks weak consumption.
China
Secular spending on technology and automation to support relative outperformance.
Investment Themes*