Equities Track Record
We present the performance of our equity asset allocation, which highlights our allocation preferences within the universe of advanced economies. Our portfolio is evaluated against a widely recognised global benchmark to provide clients with clear, real-time insight into the effectiveness of our allocation strategies.
Our specific preferences within G10 equity markets and full details of our equity strategy views are available in our Global Asset Allocation report, available exclusively to clients of Oxford Economics.
Within our G10 equity allocation we use MSCI USD-unhedged total return indices to calculate performance. By using USD-unhedged returns, rather than local currency returns, we ensure that our allocations are actionable for international investors of any base currency.
We evaluate the performance of our overweight allocations against the MSCI global equity USD-unhedged benchmark.
Key Equity Strategy Views
- Equities: Tech-driven US bull market will continue – We think the US equity bull market will continue as activity proves relatively resilient to tariffs and the Federal Reserve resumes its easing cycle. We have therefore raised our developed market equity allocation to overweight.
- Equities: Japanese equities are still good value – We remain overweight Japanese equities. The market has rallied sharply since the US-Japan trade deal, but we think valuations are still attractive given Japan's improving profitability and low bond yields.
- Equities: Quick Take – Resumption of Fed's easing cycle to support stocks – We believe the resumption of the Federal Reserve's easing cycle will support US equities. Growth concerns may cause volatility in the near term but a recession is unlikely. Historically, equities outperform bonds following Fed rate cuts if growth proves resilient.
- Equities: Equities: Eurozone banks are supported by strong EPS momentum – We think Eurozone banks will continue to outperform the region's broader equity market. The sector was the standout performer in the Q2 earnings season, and we think its relatively strong EPS momentum will persist.
- Equities: Sector strategy – cyclicals vulnerable to near-term slowdown – We think cyclical equities have rallied too far, too fast and are vulnerable to growth disappointment in the near term. Their relative valuations are consistent with strong global growth, not the slowdown we expect over the next couple of quarters.