The last few weeks have seen a considerable increase in talk about a potential U.S. recession, largely as a result of the inversion in the yield curve. As we have written in previous notes, we are generally not ready to forecast a U.S. recession, believing instead that headwinds in the manufacturing sector will be matched by improvements in personal consumption and housing as well as Fed easing.
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How much will a new investment idea diversify a portfolio? Will it really add something new? Or will it just provide more of the same? To answer that question, many people start with the correlation coefficient.
Factor investing is a relatively new concept that continues to gain acceptance among market participants. Despite that, there remains much debate over how factors can best be incorporated into the investment process. Some investors even view the factor approach to portfolio construction as a preferred alternative to traditional methods of asset allocation.
The Mackenzie Asset Allocation Team has developed a tool to value global assets on the basis of expected fundamentals. Read the Team’s new white paper to learn more about the tool and its role in their tactical asset allocation process.
Mackenzie Chief Economist Todd Mattina analyzes issues and implications of the results of Italy’s constitutional referendum.
Equity markets rebounded significantly in Q1 after a tumultuous end to 2018. The MSCI ACWI Index returned 12.4% in local currency terms, the biggest quarterly gain since the rebound from the financial crisis in 2009.
After a long run of calm and generally up-trending equity markets, 2018 proved to be considerably more volatile, with three violent, successive selloffs in February, October, and December.
‘The U.S. vs. the World’ was one of the key themes that emerged in Q3. Equities continued to outperform bonds over the quarter, with the MSCI ACWI returning 4.7% in local currencies and 2.5% in CAD terms. This compares favorably to -0.2% on the Bloomberg Barclays Global Aggregate Bond Index hedged to CAD and -1.1% on the equivalent Canadian bond index.
The theme of higher volatility, which began in the first quarter, continued through the second. Equities outperformed bonds over the quarter, but it was not smooth sailing as markets reacted, sometimes forcefully, to signs of a slowdown in global growth or to political events.