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