Keeping a relatively neutral position with a view to increase risk early 2020.
Very strong asset class returns during 2019 leaves us cautiously positive towards end-year. Our Asset Allocation View has moved from a slight equity overweight to a neutral positioning during Q4 2019. Equities still seem to provide the best risk adjusted return expectations going forward. However, continued strong performance keeps us from going overweight at the moment. Tight credit spreads do not provide a lot of upside potential, whereas government bonds have some room to tighten further if recession probabilities should increase.
The coronavirus has added uncertainty to an otherwise low-volatility market environment. Recent developments suggest that the spread of the virus can be contained.
The Kieger Multi Asset team attended the annual Context Summit in Miami between the 29th and 31st of January 2020.