Global Asset Allocation Viewpoints, 1Q 2024

Amid volatility around “Liberation Day”,1 global equities fell 11% and VIX jumped north of 50. But over the full quarter, global stocks are up more than 9%, VIX is down over 5 points, and U.S. policy rates remain on hold. The Internet is not a totally reliable and secure medium of communication. Principal Global Investors accepts no liability for the security or confidentiality of information transmitted in this way and any such transmission of information shall be at your own risk.

• J.P. Morgan Multi-Asset Solutions manages over USD 438 billion in assets and draws upon the unparalleled breadth and depth of expertise and investment capabilities of the organization.
• As a result, we believe equities offer greater upside potential relative to fixed income.
• This information should not be relied upon as investment advice, research, or a recommendation by BlackRock regarding (i) the funds, (ii) the use or suitability of the model portfolios or (iii) any security in particular.
• Any views and opinions expressed subsequently are not those of Invesco.

Macro Outlook

Supported by accommodative policy, the global economy is proving resilient despite trade policy uncertainty and geopolitical conflict. Nothing in this website shall be considered a solicitation to buy or an offer to sell a security, or any other product or service, to any person in any jurisdiction where such offer, solicitation, purchase or sale would be unlawful under the laws of such jurisdiction. Spreading the risk and number of potential opportunities across various asset classes, such as equities, fixed income and commodities.

In the U.S., the “Mag-7″2 tech stocks have both valuation and earnings support, while the remainder of the S&P 500 trade close to all-time peak valuations. Since we expect tech adoption to continue to drive rapid earnings growth in the sector, we tilt our U.S. exposure to tech and communication services. For all the market turmoil unleashed early in the quarter, the U.S. economy remains solid. Still, we judge the economy overall to be in late cycle, seeing few signs of major imbalances or excesses. The Company will not be registered under the United States Investment Company Act of 1940 as amended.

• Bitcoin and gold, which dominated over the past year, have slipped in recent months but still outperformed fixed income.
• We think the global economy could accelerate, despite a slowing US economy and that the Fed is about to embark on rapid easing.
• But over the full quarter, global stocks are up more than 9%, VIX is down over 5 points, and U.S. policy rates remain on hold.
• The steepening bias in the U.S. is likely to persist but may face near-term risks due to crowding and potential adjustments in Fed pricing.

GA Selects Tax-Aware

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This positions U.S. policy settings on the tighter side of neutral, even as real rates temporarily decline with rising CPI. In contrast, the European Central Bank (ECB) and Bank of Japan (BoJ) are now in accommodative territory, with the Bank of England (BoE) moving in that direction. The entire content of this website is subject to copyright with all rights reserved.

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Global growth is expected to be stable but slow

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GA Selects Tax-Aware Strategy UMA Portfolio

Geopolitical tensions from Russia and Ukraine to Gaza and global trade relations continue global asset allocation to simmer. On the other hand, a rebound in growth could boost risk appetite especially if the Fed continues to ease. Economic growth in the U.S. remains resilient and the new Trump administration is focused on business-friendly, pro-growth policies coupled with the desire to cut interest rates, taxes, regulation and the overall size of the Federal government. Despite stretched valuations, U.S. markets remain best positioned to benefit from the AI secular trend.

Our funds often possess holdings – and employ trading strategies – that are simply inaccessible through ETFs. Wolfe Research emphasizes the potential for increased volatility in 2025, given the uncertainty surrounding the new administration’s policies and their impact on the economy and markets. They also highlight the potential for higher inflation, driven by strong consumer spending and potential policy changes. Beyond China, other markets have been targeted, including Korea, Taiwan and Brazil. Relatively low valuations and rapid tech advancements provide offsetting opportunities as is the potential for more stimulus in China.

I confirm that I’m a UK institutional investor (Professional client) and I agree to and will comply with the Terms and Conditions of this site. I confirm that I’m a UK financial adviser (Professional client) and that I agree to and will comply with the Terms and Conditions of this site. In the U.S., tariffs will likely cause a temporary spike in inflation, peaking toward the end of 2025 with the core Consumer Price Index (CPI) hitting 3.8% 4Q/4Q at year-end. We expect inflationary pressure to subside over 2026, returning toward the Fed’s target by 4Q26. By selecting the “Accept” button below, and entering this website, you agree to these terms and confirm and represent that you are a “Professional Client”. Access to this website is only permitted for “Professional Clients” as defined in the Conduct of Business of the Dubai Financial Services Authority’s Rulebook.

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Global Asset Allocation Viewpoints

We have a modest overweight view on equities overall relative to fixed income. In summary, while the economic landscape presents near-term challenges, we believe the U.S. economy remains resilient. Away from the U.S. we see combined fiscal and monetary support as an upside risk, especially into 2026. Together this supports a modestly pro-risk stance, but also calls for greater emphasis on RV and end-manager return streams.

International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. These risks often are heightened for investments in emerging/developing markets and in concentrations of single countries. Funds that concentrate investments in specific industries, sectors, markets or asset classes may underperform or be more volatile than other industries, sectors, markets or asset classes and the general securities market.Actively managed funds do not seek to replicate the performance of a specified index.

This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature or other purpose in any jurisdiction, nor is it a commitment from J.P. Morgan Asset Management or any of its subsidiaries to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical and for illustration purposes only. This material does not contain sufficient information to support an investment decision and it should not be relied upon by you in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and determine, together with their own financial professional, if any investment mentioned herein is believed to be appropriate to their personal goals.