Fixed Income

IFI Multi-sector asset allocation outlook

IFI Multi-sector asset allocation outlook
IFI multi-sector asset allocation overview

• Macro factor summary: We continue to expect growth to bounce back strongly in 2021 on the back of vaccine distribution and large amounts of stimulus. Our growth expectations continue to be above consensus. Although base effects should push up inflation in the first half of 2021, we expect inflation to remain well contained in the medium term due to excess capacity in the service sector and residual impacts of COVID. Global financial conditions remain easy and are supportive of markets, in our view.

• Asset allocation summary: Our macro factor framework suggests neutral positions in global duration and credit and an underweight position in the US dollar.

• Risk position summary: Underlying growth momentum is relatively supportive of risk taking, but valuations are tight, in our view. We prefer to stay neutral in risky assets, and use selloffs as an opportunity to buy risky markets that we believe will be supported by the fundamentals in the medium term. Growth with easy policy should be supportive of emerging markets generally.

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Investment risks

  • The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

Important information

  • All data is as at 15 January 2021 unless otherwise stated.

    This document is marketing material and is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell securities.

    Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals, they are subject to change without notice and are not to be construed as investment advice.