Multi-Asset Solutions Weekly Strategy Report
- After losing a third of its value in a month's time in Ql, the MSCI All Country World Index (ACWI) was up nearly 20% for Q2. The gains reflected progress toward lifting lockdown measures globally and an initial rebound in economic activity that was quicker and stronger than anticipated.
- Growth and cyclical stocks led strong equity performance, particularly as economic data started pointing to positive growth momentum. In credit markets, Federal Reserve (Fed) purchases of ETFs and single name bonds pushed spreads tighter, particularly in the investment grade space.
- We think a sustainable economic recovery has begun and we take a moderately risk-on stance in multi-asset portfolios. The path of COVID-19 will impact the pace of the recovery, but likely will not threaten another material decline in economic activity. We hold a modest overweight to stocks, an overweight to U.S. high yield and a mild duration underweight.
EXHIBIT 1: CYCLICAL STOCKS OUTPERFORM OVER THE QUARTER
Please be aware that this material is for information purposes only. Any forecasts, figures, opinions, statements of financial market trends or investment techniques and strategies expressed are, unless otherwise stated, J.P. Morgan Asset Management’s own at the date of this document. They are considered to be reliable at the time of writing, may not necessarily be all-inclusive and are not guaranteed as to accuracy. They may be subject to change without reference or notification to you. JPMorgan Asset Management Marketing Limited accepts no legal responsibility or liability for any matter or opinion expressed in this material.
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.