Negative
Positive
Views expressed reflect CIO team expectations on asset class returns and risks.
Asset Class Summary Views
Neutral
The CIO team’s views draw on AXA IM Macro Research 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
Yield curve to steepen when Fed cuts rates. Long yields range bound.
Euro - Core Govt.
ECB to cut before Fed. Bund yields range bound. Returns to be modest.
Euro - Peripherals
Near-term political uncertainty suggests caution.
UK Gilts
Lower inflation should allow rate cuts. Positive returns in one-to-five year part of the curve.
JGBs
Low returns. Policy indecision by Bank of Japan and weak yen make JGBs unattractive.
Inflation
Balance of risks would suggest modest increases in break-evens.
Credit
Income assets should be part of portfolios. Low spreads suggest limited excess returns.
USD Investment Grade
All in yields are attractive. Excess return limited by narrow spreads.
Euro Investment Grade
Constructive macro, resilient fundamentals, strong technicals support harnessing income.
GBP Investment Grade
Returns supported, given current yields and expectations of faster pace of rate cuts.
USD High Yield
Attractive carry. Fundamentals and funding strength remain strong.
Euro High Yield
Strong technical and ECB cuts support spreads and total return. Watch political risk.
EM Hard Currency
Solid carry. Universe volatility subsided. Later Fed, delays recovery.
Equities
Growth supports earnings expansion in 2024. Rates cuts in scope to broaden the rally.
US
Slowing growth unlikely to damage earnings picture. Multiples are high.
Europe
Positive economic surprises, less demanding EPS estimates, attractive valuations.
UK
Monetary policy and change of government should give boost to sentiment.
Japan
Benefits from growth in semis. Reforms in focus for broader performance.
China
Growth remains unbalanced. Accelerating industrial output, masks weak consumption.
Investment Themes*
Secular spending on technology, automation, to support relative outperformance.
*AXA Investment Managers has identified six megatrends - which companies are tapping into - that we believe are best placed to navigate the evolving global economy: Technology & Automation, Connected Consumer, Ageing & Lifestyle, Social Prosperity, Energy Transition, Biodiversity.