A view is only useful if it can be wrong.
Our outlook is maintained by the research desk and challenged in investment committee. It sets the backdrop against which individual allocation decisions are argued, but it never overrides a mandate's written policy.
We publish direction and reasoning rather than precise forecasts. Point predictions create false confidence; a well-argued range creates better decisions.
The cost of capital is the gravity of every asset price.
We assess where policy rates, real yields and credit spreads sit relative to history, and how much of the current market level depends on those conditions persisting.
- ·Real yields tracked against long-run averages
- ·Credit spreads assessed for compensation, not level
- ·Refinancing walls monitored by sector
How much risk is being paid for today.
Rather than forecasting direction, we ask whether current prices offer adequate compensation for the risk being taken. When they do not, we reduce, regardless of momentum.
- ·Compensation-per-unit-risk as the primary test
- ·Momentum acknowledged, never followed alone
- ·Liquidity reserve raised when spreads compress
We would rather be early and dull than late and certain.
When the view is revisited.
- Desk reviewWeekly
- Investment committeeMonthly
- Full outlook revisionQuarterly
- Ad hoc revisionOn material regime change
Read the notes behind the view.
Individual research pieces set out the evidence supporting each element of the house position.