 |
 |
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
Updated Investment Views for the Second HalfFri, Jul 29, 12:38 PM ET, by , BlackRockLower for longer rates and low returns. Monetary policy may have reached the limits of its effectiveness in driving asset prices. And expect volatility ahead. These are the key themes BlackRock portfolio managers and executives believe are likely to shape markets in the second half, as I shared in an earlier post on our new midyear outlook. Also on our radar for the remainder of 2016: Political uncertainty and weaker global growth. You may be wondering, however, what this outlook means for portfolios, especially in the wake of the United Kingdom’s Brexit vote. We have updated our investment views to reflect our expectations for the third and fourth quarters. Here’s a quick look at some of our key asset class views for the second half. Our outlook on fixed income improvesWe have turned more positive on some fixed income assets due to elevated geopolitical risks and easy monetary policy in a low-growth world. We especially like income, including investment-grade credit. We see investment-grade corporate debt as attractive in a world hungry for yield. We also prefer emerging market (EM) debt, whose relatively higher yields now look more attractive post Brexit given that some key headwinds to EMs have turned into tailwinds. We’re neutral toward U.S. Treasuries and European sovereigns, but we do like the former as a hedge against global risks. We also prefer selected eurozone peripheral sovereigns. More watchful on stocksWe are now more cautious on global equities. Heightened economic and political uncertainty could exacerbate already poor corporate earnings trends, and valuations look elevated. We’re particularly cautious of European stocks, given factors including poor profit growth. We have downgraded European stocks to underweight, and hold a negative view of the eurozone banking sector. We prefer dividend growers and quality companies in the current low-rate environment. We’re focusing on companies with rising dividends, strong cash flows and low payout ratios. An added bonus for dividend growers: We see them outperforming when the Federal Reserve (Fed) eventually raises rates. We also like stocks in selected emerging markets. What would make us more bullish toward stocks overall? A pickup in earnings growth, or a shift toward fiscal expansion and structural reform. What else?In today’s uncertain, low-growth environment, we also believe exposure to gold and alternatives as diversifiers makes sense. For more on our investment views, including our views on additional asset classes, check out the Assets in Brief table on P.15 of our full midyear outlook. Richard Turnill is BlackRock’s global chief investment strategist. He is a regular contributor to The Blog. The post Updated Investment Views for the Second Half appeared first on BlackRock Blog. Investing involves risks, including possible loss of principal. This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of July 2016 and may change as subsequent conditions vary. The information and opinions contained in this post are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, its officers, employees or agents. This post may contain “forward-looking†information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this post is at the sole discretion of the reader. ©2016 BlackRock, Inc. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc., or its subsidiaries. All other marks are the property of their respective owners. USR-9886
|
|
