Pictet AM Smarts
Welcome back to Pictet AM Smarts, our regular roundup of articles analysing the trends shaping the economy, markets and society. In this month's newsletter, our experts share return projections and themes for the next five years, demystify credit and offer a new way of looking at emerging markets. Happy reading!
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Our 5-year investment outlook: projections for all asset classes
Our investment outlook is out! The analysis of our strategy unit shows that the dispersion of returns across domestic equity and bond markets will decline over the next five years. Almost every equity market in the developed world could generate an annualised return that is close to 7%. This suggests investors should consider investing across sectoral lines instead of looking at regions - and allocate more of their capital to corporate bonds. Download our report to read about the asset allocation implications in more detail.
Why you shouldn't ignore credit
As the era of high interest rates comes to an end, our conviction is that investors should look for high and stable income to better dampen equity risk over the medium term. We believe corporate bonds offers precisely that, with the added benefit of being more diverse than the equity market, due to the more even representation of sectors and being less dominated by a handful of corporate giants.
Read our article to better understand how credit works.
A new way of looking at emerging markets
Our economists share their model for looking at the emerging world: because emerging economies are heterogeneous, grouping them according to their underlying economic characteristics allows investors to better calibrate their exposure to the asset class, and by doing so should help them improve their returns. They share the four broad categories that emerging markets fall into.
Infographic: Towards jet zero
Some more reading:
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