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Tailored for investment professionals this site provides information on our products, strategies and services. Please remember capital is at risk and past performance is not a guide to the future.

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Investment views

The Multi-Asset Indicator

30 January 2020
Authors: Philip SaundersCo-Head of Multi-Asset Growth, The Multi-Asset Team

Market review

In the final quarter of the year – and the decade – markets maintained their uptrend with many stock markets ending at close to all-time highs. Markets priced in a trade truce and a recovery in global economic growth, shrugging off the impeachment of President Trump. Data was mixed but ultimately continued to show signs of stabilisation with the US job market remained robust and strength in consumer spending. This combined with interest rates remaining accommodative and the delayed benefit from previous interest rate cuts, contributed to an easing of recession fears. Finally, a decisive result in the UK general election provided markets with more certainty – at least for the time being – around UK assets.

Against this backdrop, all Growth assets generated a positive return. The S&P 500 reached a new high and European equities surpassed levels last seen in 2015. The perceived removal of most downside risks saw other risk assets tick up with oil being the best performer; the potential peaking of US shale production and OPEC’s announcement fuelling the price rally. The US dollar’s weakening against most major currencies and the prospect of a phase one trade deal helped Asian and emerging market equities post double-digit returns. A weaker US dollar was also helpful for emerging market local currency bonds. UK assets and sterling rallied following the general election. Corporate credit generated a positive return, with European high yield performing best. Listed property, however, fared poorly given its bond-like characteristics.

Defensive assets in aggregate generated a negative return. Developed market government bonds sold off on a global basis with UK gilts leading declines. The yield curve steepened as yields rose, most notably at the long end in the US. The sell off was exacerbated by Riksbank being the first to move away from negative interest rates. The Japanese yen was the sole G10 currency to weaken against the US dollar in the quarter. Gold, however, produced a solid positive return despite being a typical safe haven asset.

At a glance - our asset class views

North America  
Europe ex UK  
Asia ex Japan  
Emerging markets  
Government Bonds
North America  
Europe ex UK  
EM Hard Currency  
EM Local Currency  
Investment Grade Corporate Bonds  
High Yield Corporate Bonds  
US dollar  
Japanese Yen  
Asia ex Japan  
Emerging Markets  

  View for the coming 6 to 12 months* Previous quarter's view

*Views of Investec Asset Management’s Multi-Asset team and reflect preferences within respective asset class. As at 30.09.19.

Key themes for the coming 6-12 months

  • Did the slowing global growth of mid 2019 represent a late-cycle wobble or is it a taster of what’s to come?
  • Are central banks reaching the limits of monetary policy and, if so, is fiscal stimulus required?
  • Will geopolitical issues dominate the market or will they just add noise

Read more

Philip Saunders
Philip Saunders Co-Head of Multi-Asset Growth
The Multi-Asset Team

Important information

This material is for informational purposes only and should not be construed as an offer, or solicitation of an offer, to buy or sell securities. All of the views expressed about the markets, securities or companies reflect the personal views of the individual fund manager (or team) named. While opinions stated are honestly held, they are not guarantees and should not be relied on. Investec Asset Management in the normal course of its activities as an international investment manager may already hold or intend to purchase or sell the stocks mentioned on behalf of its clients. The information or opinions provided should not be taken as specific advice on the merits of any investment decision. This content may contain statements about expected or anticipated future events and financial results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, new legislation and regulatory actions, competitive and general economic factors and conditions and the occurrence of unexpected events. Actual results may differ materially from those stated herein. All rights reserved. Issued by Investec Asset Management, issued October 2019.

The content of this page is intended for investment professionals only and should not be relied upon by anyone else

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