Market Insights

In this outlook, we bring together teams from across LGIM to answer the key macro and market questions for our clients over different time horizons.

As we look ahead to the next three months, and consider how to invest on behalf of our clients, we are confronted by seemingly conficting signals from depressed bond yields and exuberant equities.

Nervy investors are eyeing top-heavy market-cap indices with suspicion. But how can they use factors to navigate the trade-off between diversification and concentration risk?

Whether you’re looking at equities, bond yields, currencies or economic strength, it’s the US that’s been leading the charge. Is this likely to continue?

The American midterm elections are approaching and the crystal ball gazing has begun. Here’s what investors should consider regardless of whether the US votes for a ‘distilled Donald’, the ‘Democratic double’ or a ‘divided democracy’.

The economic expansion of the last decade has been a consistent tailwind for financial assets. We see next year as the start of the twilight zone between expansion and an eventual downturn that will likely mark the end of the cycle.

The ‘one share, one vote’ standard has been in place since 1940 but the number of companies with unequal voting rights is on the rise.

What should investors make of rising yields, higher volatility and wider credit spreads?

A brief discussion of some of the behavioural biases that can explain factor premia.

Companies that have seen their share price depreciate sharply in the face of self-inflicted wounds, structural challenges, or cyclical headwinds, represent potential ‘turnaround stories’. In this article we look at the attraction of investing in these businesses, and evaluate the risks or opportunities they present.

We expect another strong year for growth with the global economy firing on almost all cylinders. But the market has priced in this optimism, implying greater vulnerability for disappointment. We expect the low interest rate environment to continue into 2018. While interest rates can drift up, we do not think this is the beginning of the end for the bond markets.

The consequences of monetary tightening will define the 2018 investment landscape.

A rising China creates the potential for tension between itself and the leading world superpower, the United States. Investors should pay attention to the shifting of global power structures.

Just as the popularity of two-wheeled pedal power has been surging across London, a different type of cycle, the economic kind, has vanished from sight.

In this quarterly outlook we outline our asset allocation views and address four key questions on wages, sterling, trade and rates.