Quintet Private Bank has introduced Counterpoint, an in-depth analysis of the world economy, financial markets, equity and other key asset classes.
Counterpoint’s analysis revealed how investors should navigate significant market and geopolitical volatility. It also considered alternative approaches to generate sustained returns in a low-yield environment.
Quintet Private Bank group chief investment officer, Bill Street, highlights the potentially bright outlook for the US and emerging markets such as China, India and Eastern Europe.
Street said: “While many believe that 2020 will see significant corrections, we believe that equities can continue to deliver positive returns.”
According to Street, there is a special appeal in the IT sector and in healthcare, which continues to benefit from structural growth drivers.
In comparison, fixed-income investors will face another challenging year, although corporate and emerging-market debt may offer better returns.
Street is positive on both European high-yield bonds and local-currency denominated emerging-market debt.
When it comes to market volatility and geopolitical uncertainty, diversification has become a key driver of reduced portfolio risk.
Street said: “With historically low correlation to the performance of both equities and bonds, alternative investments can play an important role in delivering such benefits, especially when diversifying from long-only strategies into global macro and market-neutral approaches.”
In regards to oil, prices are expected to remain under pressure as cost advantages and demand dry up.
Although Street is positive on the Japanese yen, British pound and Norwegian krone, he noted that a high cash allocation may act as a drag on portfolio performance, and sees appeal in reallocating a proportion of cash holdings to high-quality, short-duration bonds or considering a higher allocation to gold.
In 2019, gold prices rose sharply and should be supported in 2020 by continuing central bank purchasing.
He concluded: “The growing stock of negative-yielding debt makes gold a relatively more attractive and effective diversifier than bonds.”
Until last week, Quintet was known as KBL epb. The new corporate identity was inspired by music’s universal appeal and reflects the firm’s partnership approach to wealth management.
The pan-European banking group was founded in Luxembourg in 1949 and operates in 50 cities across Europe.