Q3 2017 – Quarterly Investment Letter

Global growth is set for a moderate rebound, both in developed and emerging economies.

Risks to global growth are linked to China, where financial bubbles are forming, and to geopolitics, where North Korea is the biggest threat.

The US economy should grow between 2% and 2.5% over 12 months. The proposed policies by Trump will be implemented with significant delay. We expect the FED to hike rates at least one more time before year-end.

We expect Europe’s real GDP to grow by 1.5% to 2%. With the Macron-win, the EU gets new positive momentum, but it must ensure to get Italy onboard for a successful long-term future. We foresee the ECB to announce the start of the tapering of its quantitative easing program, but implementation will be delayed into 2018.

Emerging Markets’ growth is exposed to China, where growth is expected to slow. However, we expect no fundamental Emerging Market crisis. 

The landscape is positive for risky assets, but with limited potential due to high valuations across asset classes.

We favor equity, credit and hedge funds and are negative on duration sensitive assets such as government or investment grade bonds.

When considering equities, we prefer Europe and select Asian as well as Emerging Markets. Within global fixed income markets we like bank loans both in the U.S. and Europe. We are exposed in select emerging local bonds such as in India. 

Private debt remains a key allocation for long term oriented and institutional investors.

Full Quarterly Investment Letter Q3 2017

Investment Outlook - Quarterly Investment Letter
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