Latest from BCA Research

Special Report

Today’s Special Report introduces a framework for country allocations in a fixed income portfolio based on relative monetary policy surprises. We present two approaches on how to identify opportunities in the current environment and update our country recommendations based on those.

Special Report

While some of these headwinds facing G&C are abating or at least are now priced in, it is hard to see the industry rebounding over the short investment horizon unless monetary conditions ease. However, long-term trends supporting a transition to renewable energy are intact – strong demand for energy from Big Tech, falling prices of renewable energy generation, and overall infrastructure buildout. Green energy is here to stay, and we overweight G&C on the strategic investment horizon.

Special Report

Special Report

Introducing BCA Equity Analyzer and how you can enhance equity performance by pairing our top-down macro coverage of Europe with EA’s bottom-up and stock-level analysis.

Special Report

We analyse the performance and allocation of 79 US public pension funds from 2008 to 2022 with the goal of finding insights into what drives pension fund returns and drawing lessons for institutional investors. We find that most of the performance of top funds come from Strategic Asset Allocation decisions (SAA). We also find that while hedge funds can be an attractive diversifier for large allocators, they are not as attractive for smaller ones. Finally, we suggest that using futures can be an effective way to maintain required liquidity while improving capital efficiency.

After the election, investors have begun to price in a repeat of the first Trump presidency. The market is expecting Trump to enact a flurry of policies that will unleash a year of growth like 2017. But we believe the consensus is wrong. Investors are playing the man and not the macro. The economic outlook and the political situation today are the polar opposite to late 2016. We are fading the small cap rally and recommending above-benchmark duration. We also recommend a defensive stance.

Special Report

Investors are overstating the positive fiscal impact of the Trump presidency. The bond market will have something to say about the scope for further deficit expansion via tax cuts. As such, the trade after the trade of the Trump 2.0 administration may involve less growth out of the US, not more. In the interim, however, investors should continue to expect higher yields and increased equity volatility. There are plenty of risks ahead, including geopolitics, trade, and uncertainty surrounding fiscal policy. Ultimately, 2024 is not 2016 — a seemingly obvious point, but one with market relevance. In 2016, voters gave Trump a strong mandate for nominal GDP growth. It is not clear if this is the case today. Inflation is the most important issue, least relevant is trade and globalization. As such, Trump’s renewed mandate is for supply side reforms, not more populism and protectionism.

The value of both gold and bitcoin comes from the collective belief that they are the non-confiscatable assets to own in a fiat monetary system, as an insurance against hyperinflation, banking system failure, or state expropriation. As global wealth rises, the value of both gold and bitcoin will also rise. But as bitcoin takes market share from gold, bitcoin has considerably more upside than gold, with an ultimate destination of $200,000+. Plus: 10-year T-bonds and Portuguese stocks are tactically oversold.