Rising bonds and equities, patience, and what next for the Swiss economy?

Alister Sneddon, CTO

Here are the top 3 insights for May 6th, prepared by Alister, our CTO.

Today’s Brief

  • Fidelity: Rising bonds and equities signal a positive outlook
  • NN Investment Partners: Patience
  • Lombard Orider: What next for the Swiss economy?

Rising bonds and equities signal a positive outlook

  • We may only be a quarter of the way into the year, but already December 2018 feels like a distant memory.
  • It’s easy to forget that shares spectacularly failed to deliver the Santa rally often associated with the final moments of the year, leaving world markets to go on to record their worst annual performances since the financial crisis.
  • Fears an overly zealous central bank in America might raise interest rates too much and drive the US economy towards a recession were causing investors to stay away.
  • Accompanying concerns –without quick fixes — surrounded stalled US-Sino trade talks and, needless to say, Brexit.

Genuine Scores for the top 3 Bond funds

  • PGIM Core Short-Term Bond Fund, 100
  • iShares Ultra Short-Term Bond ETF, 100
  • Invesco Ultra Short Duration ETF, 100

Patience

  • Lower interest rate environment and weaker dollar positive for EM
  • US-China trade agreement key factor in boosting confidence and investment
  • Dovish centrals banks are helping EM weather softer growth patch

Genuine Scores for top 3 Global Emerging Markets focused funds

  • BlueOrchard Microfinance, 100
  • DoubleLine Low Duration Bond Fund, 99
  • MassMutual Select Equity Opportunities Fund, 82

What next for the Swiss economy?

  • In the new year, the Swiss economy has been buffeted by global developments, while maintaining its own, distinct features.
  • As such, the Swiss economy has echoed part of the deterioration seen in the Eurozone, but also showed signs of domestic resilience in the labour market.
  • We expect the Swiss economy to continue mirroring weak growth, but with important domestic caveats.
  • Globally, central banks have adopted a more dovish stance since January.
  • In the Eurozone, the European Central Bank (ECB) reduced its economic forecasts for the region, pushed forward its expected timing for rate hikes to 2020, and unveiled a fresh round of low-cost funding for banks.
  • This means the low yield environment looks set to endure.

Genuine Scores for the top 3 Swiss focused funds

  • BGF Swiss Small & MidCap Opp, 57
  • UBS ETF-MSCI Switzerland 20/35 UCITS ETF, 54
  • iShares SMIA, 54

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All the best,
Alister and the Genuine Impact Team

p.s. all Genuine Scores are accurate as of the 5th of April