Analytics

Investor sentiment rose for the fifth consecutive week after bottoming out in late October/early November, ending neutral in all markets, except in the UK where it turned bullish for the first time since June, and in China where it remained bullish. Last week marked a turning point for most markets (except Japan and China) as uncertainty about the direction of monetary policy, which had yet to abdicate its leadership role in dictating sentiment for the past three years, declined in response to guidance from central bankers and  improved transparency and predictability on the macro side.

Get ready for the next 18 months – it could be a bumpy ride. And if it is, you’ll be well prepared for some of the most potentially disruptive ESG events (Economic, Security and Geopolitical!) with well thought-out stress tests. Below, we highlight what’s coming up, alongside some examples of comparable events you can use to help construct the most meaningful stress tests.

The rise of the mass affluent market and its rapidly changing customer behaviour and preferences have been the driving force behind digital acceleration in the wealth management ecosystem. In this blog, Tanya Bartolini, Co-Founder of multi-asset investment technology provider Jacobi, explains how wealth management organizations can use institutional-grade technology to ‘lift the lid’ on investment decision-making and provide richer insights to clients.

Country risk in developed markets has risen across the board; Diversification ratio declines on higher asset correlations; US Sectors with Momentum have shifted.

Gilt yields soar after autumn statement; Pound benefits from higher-for-longer rates; Four-week equity winning streak helps reduce portfolio risk.

Investor sentiment continued to recover last week with only one market (Asia ex-Japan) remaining bearish as of last Friday. Investors in China remained bullish (or hopeful?), despite the market’s reluctance to rise without further evidence of a credible economic recovery. Elsewhere, sentiment was still negative in Global developed markets, Global emerging markets, and Europe, neutral in Global developed ex-US markets, Japan, and the US, and turned positive in Australia and the UK.

Volatilities and correlations climb in Europe; US small caps among the big winners of last week; UK Earnings Yield style factor takes off.

Investor sentiment improved markedly last week with only two markets (Asia ex-Japan and Europe) out of seven previously, unable to complete their recovery on time and ending the week still bearish. Sentiment in Global developed markets, global developed ex-US markets, global emerging markets, Japan, and the US rose from their bearish levels in the previous week to end last week still negative but seemingly on a strong recovery path.

If you are a wealth manager, you are unlikely to have had a conversation about the performance of your clients’ portfolios without talking about taxes. Yet, surprisingly, much of the research and discussion about portfolio management is based on pre-tax returns.

Direct indexing continues to gain momentum as an investment strategy for its potential to provide higher post-tax returns and portfolio customization. Direct indexing strategies with active tax management target higher post-tax portfolio returns by achieving pre-tax investment goals with lower tax costs. In this paper, we investigate the benefit of active tax management for direct indexing strategies tracking broad cap-weighted equity market indices.

November Rebound; “Up and to the Right” vs “Down and To the Right”; Not Enough Winners

Investor sentiment recovered from its lows last week but remains bearish in seven of the ten markets we follow. Of the three markets where investors were not bearish, sentiment rose from negative to neutral in the UK and Australia but declined slightly in China, after the world’s second largest economy fell into deflation last month – sparking fears that the tepid recovery so far, may have just been an illusionary blip.