Equities Track Record
We present the performance of our equity asset allocation, which highlights our allocation preferences within the universe of advanced economies. Our portfolio is evaluated against a widely recognised global benchmark to provide clients with clear, real-time insight into the effectiveness of our allocation strategies.
Our specific preferences within G10 equity markets and full details of our equity strategy views are available in our Global Asset Allocation report, available exclusively to clients of Oxford Economics.
Within our G10 equity allocation we use MSCI USD-unhedged total return indices to calculate performance. By using USD-unhedged returns, rather than local currency returns, we ensure that our allocations are actionable for international investors of any base currency.
We evaluate the performance of our overweight allocations against the MSCI global equity USD-unhedged benchmark.
Key Equity Strategy Views
- Equities: Equity recovery to continue as growth remains intact – We remain overweight US equities as we believe extreme left tail risks have receded. The hit to the US economy is likely to be relatively modest if the oil price has peaked, with a positive fiscal impulse and rising productivity providing support for growth.
- Equities: Leading indicators imply a beat in US Q1 earnings – US equity earnings expectations have proved resilient since the outbreak of the US/Israel war with Iran, and our leading indicator implies another EPS beat in the Q1 earning season.
- Equities: Positioning for a more challenging macro environment – Equities are likely to remain under pressure as higher oil prices drive inflation and weigh on growth. However, we believe US recession risk remains low, which should cap the extent of further losses, and we still see equities rising over a 12-month horizon.
- Equities: Japanese stocks supported by robust EPS growth – We remain overweight Japanese equities. The market has rerated sharply higher following the recent snap election and valuations are beginning to look stretched. However, we think robust earnings momentum will continue to drive the market higher.
- Equities: Beneficiaries of a broadening investment upturn – We expect the US investment boom to broaden beyond AI this year, supported by low corporate borrowing costs, rising profitability, and fiscal incentives. Industrials, financials and materials are well placed to gain from this trend.