Asset Allocation Outlook August

12 August 2020

Markets were reasonably calm in July. The level of volatility declined on the equity markets, while capital market yields remained low thanks to the highly expansionary monetary policies. Spreads on bonds issued by southern European countries, credits and emerging market debt tightened. On balance July was certainly not a spectacular month, but it was positive for the risky asset classes. Positive news on stimulatory monetary and fiscal policies, improved economic data and better-than-expected corporate earnings were interspersed with concerns about the coronavirus. We have made no adjustments to our investment policy. We believe that equities are pricing in an excessively positive scenario and prefer high yield credits.

Please see Kempen’s Asset Allocation Outlook for August. The highlights this month are:

European Union agrees historic deal on recovery fund
Monetary policy keeps rates low in spite of higher inflation forecasts
Smaller impact on corporate earnings than expected
Investment policy unchanged: preference for high yield bonds over equities

2020, 12 August

Asset Allocation Outlook

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Disclaimer
Kempen Capital Management N.V. (KCM) is licensed as a manager of various investment funds and to provide investment services and is subject to supervision by the Netherlands Authority for the Financial Markets. This information may not be construed as an offer and provides insufficient basis for an investment decision.

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