This visual summary of Wellington’s latest Outlook captures insights on key economic and market developments from experts across our investment platform, ranging from macro perspectives to latest views on public and private asset classes.
Picture This: Economic forecast in 7 charts
We believe government deficits should be a growing area of focus for investors, as failure to curb fiscal spending could be the catalyst for markets to start worrying, especially in the US, UK, and France, where levels look most susceptible.
Understand what it means for bond yields.
For illustrative purposes only. Sources: Bloomberg, UK Office for National Statistics
In today’s uncertain environment, we believe investors should expect range-bound yields. However, our scenarios for excess return forecasts suggest some select new opportunities outside traditional credit.
Find out how to optimize credit exposures.
CDX HY: higher-yield credit default swaps; CLO Aaa: collateralized loan obligations rated Aaa; CMBS Aaa: commercial mortgage-based securities rated Aaa; CoCo: European contingent convertibles; CRT: credit-risk transfer bonds; CVT: US convertible bonds; EMC HY: emerging market corporate high yield; EMD: emerging market debt; EU HY: European high-yield credit; iTraxx Crossover: higher-yield credit derivatives; MBS: mortgage-backed securities; RMBS NPL or Residential MBS NPL: non-performing residential mortgage-backed securities; US BL: US bank loans; US HY: US high-yield credit; US short HY: shorter-duration US high-yield credit; US IG corp: US investment-grade corporate bonds; US IG long corp: longer-duration US investment-grade corporate bonds.Sources: Bloomberg, BofA Merrill Lynch, Morningstar/LSTA, JPMorgan, Wellington Management | Excess-return forecasts are versus duration-equivalent US Treasuries. These are simulated forward-looking excess-return and volatility expectations based on analyses of historical return and volatility characteristics. The resulting forecasts are considered, along with other fundamental and technical data points, to determine which fixed income sectors appear attractive at the time. Wellington Management determined the outlook above based on its own views and not necessarily based on objective market data. There can be no assurance that such information has been correctly determined, and nothing herein is intended to be a projection or assurance of performance of any portfolio, market, or asset class. The scenarios shown are hypothetical, for illustrative purposes only, and not representative of an actual investment. PAST PERFORMANCE DOES NOT PREDICT FUTURE RETURNS. | Chart data: As of 31 May 2024.
The second half of 2024 offers equity investors several promising themes to explore. These include extending allocations to small- and mid-caps, particularly in the US, where we see significant scope for active management; reconsidering the value of value stocks; and ensuring appropriate exposure to Japan’s structural reform story.
Discover how to go beyond the Magnificent 7 stocks.
For illustrative purposes only. Source: Wellington Management
Members of our Investment Strategy & Solutions Group share their latest views across asset classes and outline why they believe global fundamentals support a risk-on tilt despite lofty valuations and an uncertain backdrop. They also explore topical themes ranging from potential widening of US earnings to a still-positive supply/demand picture in high yield.
Explore our views
For illustrative purposes only. Source: EFPR | Face value outstanding data: 1 March 1993 – 1 June 2024 | Flow data: 3 January 2024 – 19 June 2024
Sterling’s Black Wednesday exit from the European Exchange Rate Mechanism illustrates the potential large-scale impact of currency interventions. In this new economic era, we believe it is a risk that once again requires closer scrutiny.
Understand what it means for bond investors
Evidence of regime change continues to mount, from less synchronized monetary policy around the world to more variation in company results. That can drive opportunities in alternatives investing. Here, members of our Investment Strategy & Solutions Group offer six ideas that active investors can act upon.
Discover six investment ideas
We examine how a focus on “distributed to paid-in capital,” the growing role of AI, falling start-up graduation rates, and five other trends are reshaping the venture capital landscape.
Explore emerging themes in venture capital.
Discover what's driving opportunities in private credit.
Did you miss an issue? Looking for quick, visual content? Check out our other infographics and spotlights:
Published: Early 2024
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Is copper the oil of the energy transition? Wellington looks at this commodity’s future, captured in four charts.
Published: June 2024
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The views expressed are those of the authors at the time of writing. Other teams may hold different views and make different investment decisions. The value of your investment may become worth more or less than at the time of original investment. While any third-party data used is considered reliable, its accuracy is not guaranteed. For professional, institutional, or accredited investors only.
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