Much ado about nothing?

Concerns about the longevity of the economic expansion, new COVID-19
variants and Fed policy are likely overdone. We see the recent gains in
Developed Market bonds and in Growthstyle equities as opportunities to rotate
into our preferred risk assets.

Equities: Value-oriented equity markets and sectors are likely to resume their
outperformance as recent economic and policy concerns fade.

Bonds: We prefer shorter maturity bonds, including Development Market High Yield and Asian USD debt, which are less sensitive to an expected rebound in US
government bond yields.

FX: The USD is likely to weaken after a brief consolidation. We expect European
and commodity currencies to be the key beneficiaries.