shares
With a solid outlook for corporate earnings, we maintain our bullish view, although the Omicron variant could complicate a return to normal. Overall, we expect equity returns, while more subdued than last year, to still be positive.
government bonds1
The recent rally has resulted in expensive valuations with central bank tightening imminent. Real yield curves have flattened as a result of the slowdown in economic recovery and tighter monetary policy (central bank measures to stimulate the economy). A yield curve represents the yields on bonds of the same credit quality but different maturities. Its shape gives an idea of future interest rate movements and economic activity.
raw materials
We remain positive as the inflationary environment and supply constraints are supportive. In addition, the market correction over the last month has improved the risk/reward trade-off.
corporate bonds2
We have upgraded our stance to neutral as broad widening of credit spreads has boosted valuations. Fundamentals continue to improve. The risk premium is the margin that a company issuing a bond has to pay an investor over and above the yield on government bonds. It serves as a measure of how risky the debtor is in the eyes of the market.
You can find differentiated information broken down by country, currency and individual raw materials in PDF for download.
You can find an overview of all Multi-Asset-Views outputs here.
1 Governments and corporations issue bonds to raise capital from investors. In exchange for an upfront payment from the investors, the issuer makes annual interest payments and repays the original investment amount at a specified date in the future.
2 A bond issued by a company.