Walking a tightrope

See what our team of Portfolio Managers have to say about the factors driving the current market and their outlook for the rest of 2023.

The first half of the year was marked by a rally across risky assets, that defied both an increase in interest rates and a widely anticipated risk of a recession. Global equity markets rallied around 15%, while global high yield markets increased by 5%. Despite that overall yields adjusted higher to reflect higher for longer interest rates European investment grade bonds retained a positive return year-to-date. Looking ahead, we acknowledge that economic vulnerabilities remain, with tighter credit conditions more visible. On this basis, we expect markets to continue to walk a tight rope between inflation and economic expectations. We retain a balanced strategic view, preferring investment grade credit, and selective on opportunities across risky assets.

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