https://www.ft.com/content/651cc7a4-27e3-4026-9381-76421a0203bb

 

‘In principle, you do not really need more than two: a global equity fund and a broad bond fund in your own currency, with the relative amounts a function of your return needs, ability to withstand short-term drawdowns, and need to control long-term risk on your ultimate portfolio. This gives you very good diversification, clarity and simplicity on what you are holding, and high liquidity with minimum costs if held through passive funds, mutual or exchange traded (ETFs).’


‘investors often overvalue liquidity’

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2023 outllooks

Goldman Sachs https://lnkd.in/eKzF_2K4
J.P. Morgan https://lnkd.in/eHb6-622
Morgan Stanley https://lnkd.in/e2nAMjmM
Bank of America https://lnkd.in/e8XFD8TW
BlackRock https://lnkd.in/eYxCBRGj
HSBC https://lnkd.in/eNfBiJvH
Barclays https://lnkd.in/eRT4dsFY.
NatWest https://lnkd.in/euftbUw6
Citi https://lnkd.in/eXwA-Y4X
UBS https://lnkd.in/exudCU6V
Credit Suisse https://lnkd.in/e4CEK5NZ
BNP Paribas https://lnkd.in/ec4hWEdm
Deutsche Bank https://lnkd.in/eAWCSV_7
ING https://lnkd.in/eNpdmVH8
Apollo Global Management, Inc. https://lnkd.in/ewwq_62M
Wells Fargo https://lnkd.in/euMkQnKE
BNY Mellon https://lnkd.in/ezMfVgND

 

 

JPM sum up the general samey narrative well with their Trends to watch

 

“An end to rate hikes as inflation peaks

As inflation peaks and eventually starts to decline,

central banks will stop hiking rates in Q1/Q2 2023.

However, we do not expect rate cuts in 2023

because inflation will remain above central bank

targets.

 

Growth set to stay low

Global growth is decelerating, and with monetary

policy reaching restrictive territory, we believe that it

will generally stay weak in 202

 

Fiscal challenges ahead

Public support measures to combat the cost-of-living

crisis and increasing defense spending mean budget

deficits will stay high. As borrowing costs remain

elevated, governments are likely to increase taxes to

finance spending.

 

Globalization dialed back

As the world becomes more multipolar with the

emergence of various political spheres of influence,

we expect global trade as a share of GDP to decline

and strategic sectors to be repatriated.

 

The fixed income renaissance

As bond yields reset at higher levels, inflation peaks,

and central banks stop rate hikes, fixed income

returns look more attractive. Emerging market hard

currency sovereign bonds, US government bonds,

investment grade corporate bonds and selected yield

curve steepening strategies look particularly interesting.

 

Equity markets remain volatile

Contraction of equity markets’ valuation is well

advanced, though challenged corporate profitability

from the weak economic backdrop and margin

pressure should still lead to headwinds and volatility

going into 2023. We prefer defensive sectors,

regions and strategies with stable earnings, low

leverage and pricing power, such as Swiss equities,

healthcare and quality stocks. Defensive Super-trends

such as Silver economy, Infrastructure and

Climate change should also prove less volatile.

 

USD seen staying strong

The USD should be supported by its interest rate

advantage for most of 2023. As a result, we expect

the USD to stay strong, particularly versus emerging

market currencies such as the CNY. However, some

developed market currencies such as the JPY are

now undervalued and could stage a turnaround and

appreciate at some point.

 

A good year for most alternative investments

Hedge funds should deliver above-average returns,

and 2023 is also likely to be a good vintage year for

private equity. Secondaries and private debt should

do well. In real estate, we prefer listed over direct

solutions.

 

Multi-asset diversification returns

As bond yields have reset at higher levels, fixed

income as an asset class has gained relative

attractiveness compared to equities. Diversification

benefits should return as central banks stop hiking

rates.