Our insights

September is all about getting back to normal life now that the holidays are over. This sense of normalisation – if one could really call it that in the Covid world – is happening in the wider economy too.

On 26 September, Germany will elect a new Bundestag. The outcome will set the stage for the next coalition, headed by a new chancellor, with Angela Merkel set to step down after 16 years. The next government is likely to have a greener tilt.

The upcoming reduction in net asset purchases is likely to put upward pressure on Treasury yields, but only moderately as rate hikes aren’t yet in sight. Credit and equity markets should be able to cope.

In this latest note exploring our approach to strategic asset allocation (SAA), we answer some common questions. How do we arrive at our return expectations? How to deal with lower future returns when building globally diversified portfolios? What is the role of geopolitics and sustainability in our investment process?

Before we approve a sustainable fund for investors, we assess its investment process against a range of factors to make sure it meets our high standards.

The second-quarter earnings season has been better than expected. As the global economy recovers from the pandemic, consensus profit forecasts have been too conservative again, and are being revised higher for the rest of this year and into 2022

The past 18 months have been an exercise in humility for most forecasters. Even now, the typical thinking about the spread of the Delta variant is to highlight (so far) limited effects while quickly flagging that things could turn out worse than expected. The problem with this approach is that it’s unidimensional: it delivers variants of the same scenario, with slightly different assumptions.

Another month, another upside surprise in inflation. Yet the drivers appear the same: a handful of categories – such as used cars – are driving the spike, given strong demand pressing against constrained supply.

We introduce an indicator that captures economic and financial market dynamics in the US across different phases of the business cycle. This information is useful for making investment decisions.

Quintet’s sustainable investing philosophy comprises a toolkit of approaches and dedicated assets. In this primer we deep dive into dedicated assets – arguably the sustainable investing strategy which can deliver the greatest real-world impact.

Watching the Euro 2020 final this weekend reminded us of the expression “there’s no such a thing as a free lunch”. In markets, a few weeks ago the key worry was too high bond yields as rising inflation would lead to central bank tightening. Over time, this would weaken economic and earnings growth, negatively impacting equity prices.

Our Counterpoint 2021 mid-year update suggests that volatility could rise from here: there’s less policy ammunition left if things unexpectedly go wrong, such as new virus variants derailing the recovery; alternatively, stimulus withdrawal could prove difficult, potentially raising financial instability.