Asset Class Summary Views
Views expressed reflect CIO team expectations on asset class returns and risks. Traffic lights indicate expected return over a three-to-six-month period relative to long-term observed trends.
CIO team opinions draw on AXA IM investment team views and are not intended as asset allocation advice.
Rates |
Yields remain in tight ranges, curve steepening still likely | |
|---|---|---|
US Treasuries |
Interest rate cuts still expected, foreign demand holding up | |
Euro – Core Govt. |
Lower inflation is supportive for European Central Bank easing interest rates | |
Euro – Govt Spread |
Still offering potentially attractive returns | |
UK Gilts |
Cheap valuations but looking for better news on fiscal policy | |
JGBs |
Higher yields seem likely given current inflation and fiscal risks | |
Inflation |
Continue to like short-duration inflation-linked bonds |
Credit |
Narrow spreads and long positions create potential risks | |
|---|---|---|
USD Investment Grade |
Positive fundamentals and momentum but valuations are rich | |
Euro Investment Grade |
Demand continues to be strong but excess returns more modest | |
GBP Investment Grade |
Potentially attractive returns for sterling- based investors | |
USD High Yield |
Risks to cyclical sectors from global trade situation, with spreads tight | |
Euro High Yield |
US tariffs on European Union exports could impact some more leveraged names | |
EM Hard Currency |
Carry remains attractive but strong flows into local currency bonds |
Equities |
|
Earnings resilient despite macroeconomic uncertainties |
|---|---|---|
US |
Artificial intelligence-driven capital expenditure boom is sustaining large-cap earnings | |
Europe |
US tariffs and expected German demand boost create opposing forces | |
UK |
Market displays defensive qualities; domestic firms should benefit from continued rate cuts | |
Japan |
Artificial intelligence and robotics are supportive themes for Japan | |
China |
Technology and positive policy catalysts; broader earnings challenged by deflation | |
Investment Themes* |
Long-term positive on artificial intelligence and carbon transition strategies |
*AXA Investment Managers has identified several themes, supported by megatrends, that companies are tapping into which we believe are best placed to navigate the evolving global economy: Automation & Digitalisation, Consumer Trends & Longevity, the Energy Transition as well as Biodiversity & Natural Capital
Data source: Bloomberg
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