Looking beyond the restart
• Strategic horizon : We keep our overweight on equities. We see a better outlook for earnings and moderate valuations. The relative appeal of developed market equities brightens on incorporating climate change in our expected returns.
• Tactical horizon : We stay overweight as we expect the restart to accelerate and interest rates to stay low.
• Strategic horizon : We maintain our underweight given rich valuations, with a preference for equities to take risk.
• Tactical horizon : We stay neutral credit following the tightening in spreads, particularly investment grade.
• Strategic horizon : We keep our underweight given diminished ability to act as portfolio ballasts. We prefer inflation linked bonds. Rising debt levels may eventually pose risks to the low rate regime.
• Tactical horizon : We remain underweight duration on expectations of gradually climbing yields amid the restart.