Multi Asset Portfolio - Increase focus on bonds as cyclical risks are growing
The recovery in equity markets at the beginning of the year, following a more dovish tone by major central banks and a sharp drop in bond yields, has given way to a more mixed performance.
Cyclical indicators remain worrisome, while the end of US fiscal loosening in 2020 and the intensification of geopolitical, political and trade tensions all appear significant headwinds to growth and risky assets.
In their just released Multi Asset Portfolio “Increase focus on bonds as cyclical risks are growing” outlook for Q3 2019, Societe Generale global asset allocation strategists reinforce somewhat their cautious - but not bearish - stance, favoring assets providing yield with low volatility and portfolio protection. The dovish asymmetry on the Federal Reserve remains the backbone of their asset allocation for the coming year.
In coordination with Societe Generale’s strategists on all asset classes, and using quantitative, positioning and behavioral tools detailed in the report, they come up with an asset allocation aimed at being resilient to a global slowdown.