Themes and implications from the Global Fixed Income, Currency & Commodities Investment Quarterly meeting
Above Trend Growth remains our base case despite the many challenges ahead; we reduced its probability to 60% from 80%.
We increased the likelihood of Sub Trend Growth to 20% from 0%, as uncertainties surround the provision of additional fiscal stimulus, not only in the U.S. but in Brussels, Tokyo and Beijing. We left the probability of both Recession and Crisis at 10%.
Key risks are two big unknowns: the timing of a vaccine’s approval, manufacture and distribution and the outcome of the U.S. general elections.
Higher beta U.S. corporates top our list; higher yielding municipal bonds also look attractive, and we find value in certain local emerging market debt and currencies.
Scenario probabilities (%)
Core Bond Fund
Enhance total return by broadening the borders of your bond portfolio.
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The value of investments and the income from them can fall as well as rise and investors may not get back the full amount invested. Past performance is not a guide to the future.
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