Multi-asset

Multi-Asset World Cup 2018: The finals

With only four teams remaining out of 32 group-stage contenders, we’ve now got to the crunch.

World Economic Forum (WEF) Global Competitiveness Scores – competitiveness and productivity are key aspects to a lot of our analysis
Multi-Asset World Cup 2018: The finals

It’s been an amazing two weeks of Multi-Asset World Cup football. There’s been plenty of drama both on and off the pitch. For those who have missed out we have recaps of the matches for the Group stage and Knock-out rounds.

The semi-finals will see Russia taking on Germany and England against Portugal. England fans were keen to point out this was the exactly the same semi-final match-ups as the 1966 World Cup, though of course with West Germany versus the USSR as it then was. Could football finally come home again after 52 years of hurt?

For the semi-final and final matches we up the stakes and have four criteria that lead to goals:
 

  • Misery Index
    This is the sum of the inflation rate and the unemployment rate. We aggregate the two measures as a summary measure of economic health. Ideally you want an economy with a low rate for both, and therefore, less misery.
  • Equity returns
    We use the last four years’ returns of each country’s equity market (in US dollars). Conversely to what you might expect, we actually want to see a low number here as a low equity return over the last few years is a proxy for equities with cheap valuations today. All else equal, markets with cheaper valuations tend to have better performance going forward. World Economic Forum (WEF) Global Competitiveness Scores – competitiveness and productivity are key aspects to a lot of our analysis, and the WEF compiles a ranking of countries based on twelve “pillars”. A more competitive economy is likely to have better earnings prospects, and a better trade-off between higher growth and higher inflation. We consider two variables based on the World Economic Forum’s competitiveness ranking:
  • The Technological Readiness index
  • The Infrastructure index, which covers the state of physical infrastructure like roads and rail.

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