Portfolio

Informe especial

Thematic investing has become increasingly important for investors over the past few years. However, the vast majority of investors underperform when investing in thematic strategies. In this report we provide three tips for investors who wish to allocate to thematic strategies. These tips have little to do with identifying transformative paradigm shifts, but rather with how to profitably take advantage of them in markets.

AI is not the Early-Stage bet investors should be making. It is obvious and highly competitive. Venture Capital is not about direct competition but about pioneering new directions. While everyone is distracted with AI, investors should look to Aerospace & Space Technology. Strategic buyers will provide exit opportunities.

Informe especial

We assess where emerging markets debt is on a strategic and cyclical basis. We find it has benefited from local central banks boosting their inflation-fighting credentials and governments improving financial stability. As a result, EM debt is behaving less like a risk-on asset, changing the role it plays in a global portfolio. We also expand our asset allocation playbook by assessing how the asset class behaves across the business cycle. While EM debt is more than a risk-on play, we suggest investors stay cautious on a cyclical horizon.

At the asset class level, the GAA Quant model is overweight equities, underweight bonds, and neutral cash.

Amid patchy global growth, the US economy remains resilient. However, tight monetary policy will eventually trigger a recession in the US too. The stock market rally has been very narrow. Stay underweight risk assets.

Informe especial

Multifamily Real Estate is poised for a downturn, which will have ripple effects on the global economy. Present market fundamentals fail to compensate for the risks. Investors should seek opportunities in Fixed Income and Credit markets, while avoiding equity investments in Multifamily.

Informe especial

Looking at small caps at the global aggregate level can be misleading. Small caps are cheap and oversold in the DM universe, but expensive and overbought in EM. Watch closely for clarity on the coming recession to upgrade DM small caps to overweight relative to DM large caps. Lighten up small cap exposure in the EM universe. For investors in the US small caps, the S&P 600 is a more beneficial benchmark for asset owners, while the FTSE Russell 2000 is an easier-to-beat benchmark for asset managers.

We are upgrading Europe Private Equity, predominantly driven by Buyouts, from underweight to neutral. Our outlook towards Global Buyouts is improving, with Europe benefiting from enhanced credit availability and an earlier recession. Non-domestic investors may also be advantaged by an appreciation in the EUR and GBP over the next market cycle.

The GAA Quant model is neutral on all assets.

When will the US also buckle under high rates? We expect a US recession to begin around mid-year. Stay defensive.