March 26, 2021—We are currently overweight emerging markets equities—including Chinese equities. Four pillars support our position. First is our view that the vaccines have prompted a cyclical rally that is, in general, constructive for global equities. Second, we believe emerging markets will see faster economic growth than developed markets. Third, the Asia ex-Japan region, including China, has so far successfully managed the COVID-19 crisis, in our opinion.
March 1, 2021—Some of our advisors and clients have asked whether the Investment Committee (IC) might make a tactical allocation to emerging markets U.S. dollar (EM USD) bonds. No doubt these questions are motivated by the fact that EM USD bonds offer higher yields than U.S. investment-grade bonds and involve return streams that are only partly correlated to those of other asset classes.
January 22, 2021—On November 9, 16, and 23, three vaccine manufacturers announced surprisingly positive results in Phase-3 trials of their COVID-19 vaccines. Global equity markets quickly repriced “economic reopening” stocks on the back of this news.