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The views expressed are those of the authors at the time of writing. Other teams may hold different views and make different investment decisions. The value of your investment may become worth more or less than at the time of original investment. While any third-party data used is considered reliable, its accuracy is not guaranteed. For professional, institutional, or accredited investors only.
Macro Strategist John Butler believes a seismic global shift is underway that will disrupt the macroeconomic dynamics of the past two decades, challenging long-held investment assumptions. Geopolitical turmoil and global policy shifts will remain disruptive forces in the year ahead, according to Geopolitical Strategist Thomas Mucha and Macro Strategist Santiago Millán. While risks have been elevated, they also argue that differentiation among countries and companies has also created opportunities for active investors.
In the coming year, US Macro Strategist Juhi Dhawan expects to see inflation decline from 2022’s elevated level, the economy adjust to higher interest rates, and labor markets feel the pain of restrictive Fed policy. In Europe, Macro Strategists Eoin O’Callaghan and John Butler discuss the contrasting prospects of the Euro Area and the UK and why 2023 could bring unexpected positive results in the region. In Asia, Macro Strategist Santiago Milan argues that, with the bar set so low for China’s economy, it won’t take much for an upside surprise in 2023.
Commodities have been at the center of 2022’s tumultuous market environment. Portfolio Manager David Chang and Investment Director Joy Perry describe the tension between micro and macroeconomic drivers, and between cyclical and structural dynamics that we expect to drive commodities in 2023.
Markets may be jumping the gun when it comes to expectations for a policy pivot and the likely risk-asset rewards. Multi-Asset Strategists Nanette Abuhoff Jacobson and Supriya Menon, members of our iStrat team, still see bumps in the economic road in their 1Q2023 Multi-Asset Outlook, though their forward-looking view has brightened a bit when it comes to China and other emerging markets.
Co-Head of Investment Strategy Natasha Brook-Walters discusses downside mitigation given the shifting equity/bond correlation, the impact of cyclical and macro volatility, and opportunities to position for long-term change. With economic conditions expected to remain volatile in the coming year, iStrat Team members Investment Strategy Analyst Alex King and Multi-Asset Strategists Nick Samouilhan and Adam Berger suggest that thematic allocations may help reduce the importance of the cycle to portfolio returns.
iStrat INSIGHTS— iStrat is the investment strategy and solutions group within Wellington. iStrat brings together our Multi- Asset, Fundamental Factor, and NextGen Thematic investment teams to provide differentiated, multidisciplinary research, advice, and strategies from across investment disciplines.
Head of Investment Research Mary Pryshlak and Equity Portfolio Manager Tim Manning examine three game-changing structural themes that they believe will alter global equity market dynamics, asset pricing, and ingredients for corporate success in the year ahead: climate change and ESG integration, the revolution in enterprise data, and aging populations.
Fundamental Factor Team members Co-Head of Investment Strategy Gregg Thomas and Investment Specialist Chris Driscoll offer factor-based insights on defensive allocations, diversifying strategies, and macro stress tests. Our fintech investors delve into high-conviction ideas in embedded finance; buy now, pay later; and digital assets. Portfolio Manager Jamie Rice highlights potential winners and losers in emerging markets equity against a still-challenging market backdrop.
Macro Strategist John Butler argues that the macroeconomic environment that has underpinned global financial markets for the past 25 years is changing significantly, with profound implications for investors. In the wake of 2022’s market sell-off and volatility, Fixed Income Portfolio Manager Rob Burn highlights some potentially attractive investment opportunities for discerning credit investors.
For emerging markets debt investors, Macro Strategist Gillian Edgeworth spotlights opportunities created by extreme credit spread dispersion across countries. Fixed Income Portfolio Manager Konstantin Leidman advocates a neutral risk posture and argues for maintaining sufficient liquidity to take advantage of opportunities for high-yield bond investors.
Multi-Asset Strategists Nick Samouilhan and Adam Berger explain how alternative investments may help allocators make tailwinds out of macro and market headwinds. Ehab Hosny, Brendan Fludder, and Noah Comen — members of iStrat’s Fundamental Factor Team — argue that hedge funds could be valuable building blocks for a fixed income substitute portfolio and preview their research on how such a portfolio could be constructed.
Co-Head of Private Investments Michael Carmen shares his outlook for the private equity market, focusing on today’s normalizing multiples, continued innovation, and fewer competitors for the most attractive deals. Head of Private Placements Emeka Onukwugha and Head of Portfolio Management, Private Placements Elisabeth Perenick highlight conditions in investment-grade private credit and go deeper on how today’s challenging overall market landscape could fuel opportunities for investors.
Director of ESG Research Carolina San Martin and Director of Climate Research Chris Goolgasian, join Head of Sustainable Investment Wendy Cromwell in exploring areas of focus — and key engagement topics — for 2023, including climate change, biodiversity, modern slavery, data privacy, and shareholder rights. Director of ESG for Private Investments Hillary Flynn, Associate Director of ESG for Private Investments Andrew Morales, and Research Associate Otua Sobukwe dig into five critical ESG topics for private companies.