Press Release
KKR Releases 2019 Global Macro Outlook
January 9, 2019Henry McVey Sees Value in Liquid Markets, but Acknowledges a New Reality for Investing: “The Game Has Changed”
“As we begin 2019, we definitely tilt more positive in our global asset allocation and macro positioning, despite our call for a weaker economic environment,” McVey says. “However, it is not business as usual in the global capital markets these days. In our humble opinion, the game has changed.”
Specifically, McVey and his team see four major influences that will require a different approach to asset allocation for investors in the years ahead:
1. A structural shift from monetary policy to fiscal policy is under way
2. Technology, while still an incredibly powerful agent of change in the global economy, now faces more valuation and regulatory headwinds than in the past
3. Tightening liquidity conditions amidst higher real rates are macro headwinds that must now be considered
4. The rise of geopolitical uncertainty warrants a higher risk premium than in the past
Despite these crosswinds, McVey’s message is not to head to the sidelines. Rather, he advocates staying invested and electing thoughtful asset allocation preferences by taking into account the key macro themes outlined throughout his report. By doing so, he believes investors with a long-term game plan and the ability to buy complexity amidst uncertainty can drive above-average returns from current levels.
The report details the GMAA team’s updated asset allocation model for
2019, including the team’s view on interest rates, inflation, oil,
stocks versus bonds, and cycle duration, as well as geographic views,
specifically regarding the economic outlook for the
In terms of key calls for 2019, McVey and his team believe public
equities are now pricing in a recession, with liquid credit not far
behind. So, for the first time in three years, he is now moving to an
overweight position in public equities, including the
Links to access this report as well as an archive of
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- For an archive of previous publications please visit www.KKRinsights.com
About
About KKR
KKR is a leading global investment firm that manages multiple
alternative asset classes, including private equity, energy,
infrastructure, real estate and credit, with strategic partners that
manage hedge funds. KKR aims to generate attractive investment returns
for its fund investors by following a patient and disciplined investment
approach, employing world-class people, and driving growth and value
creation with KKR portfolio companies. KKR invests its own capital
alongside the capital it manages for fund investors and provides
financing solutions and investment opportunities through its capital
markets business. References to KKR’s investments may include the
activities of its sponsored funds. For additional information about
The views expressed in the report and summarized herein are the
personal views of
View source version on businesswire.com: https://www.businesswire.com/news/home/20190109005244/en/
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media@kkr.com
Source: KKR
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