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1、MARKET OUTLOOK Mid-Year 2023Marketing materialPublication date:15 June 2023,8:00 CETPlease find important legal information at the end of this document.Source:Bank Julius Baer&Co.Ltd.(Julius Baer),unless explicitly stated otherwise.3 EditorialDear Reader,The year of the cool-down,as we labelled 2023
2、 in our previous outlook,continues but not for invest-ors.Geopolitical tensions,with US-China relations at the centre of the debate,as well as discussions about peak interest rates in the US,a potential default by the US government,the rise of artificial intelligence as an investment topic,and a ban
3、king turmoil that originated in the US but is also taking its toll in Switzerland have been keeping investors on their toes.Meanwhile,on the macroeconomic front,inflation figures and economic momentum have proved to be stickier than expected.The current cycle is unusual in that central banks are tig
4、htening vigorously in response to supply shocks,but there has been no private sector boom.This and the absence of major imbalances have made the economy much less sensitive to interest rates than expected.Still,the reverberations of central banks decision to tighten the money supply more than we had
5、 hoped will be felt well into 2024.As a result,we expect both infla-tion and growth,especially in the US,to slow more than we had forecast at the beginning of the year.Taking the above into consideration,some challeng-ing months lie ahead.However,difficult times also tend to offer many opportunities
6、 for those who are prepared.Hence,we remain fully invested for now,with our investment strategy focused on quality across all asset classes.This Market Outlook publication is designed to help you navigate the investment environment that we expect to prevail for the remainder of 2023 and into 2024.We
7、 hope that it will provide you with some useful insights and thank you for your continued trust in Julius Baer.Yours faithfully,Christian GattikerHead of ResearchYves BonzonGroup Chief Investment OfficerMember of the Executive Board 4ContentsEditorial 3A brief review 5Macroeconomy and strategy 10Fix
8、ed income 20Equities 25The promise of relative value investing 34Further information 45Important legal information 48A brief reviewSticky inflation has forced central banks to keep mon-etary policy tight so far in 2023.This has been good news for bonds,allowing investors to grab some yield without h
9、aving to travel too far down the risk curve.Equities,meanwhile,have continued to climb the wall of worry,shrugging off the US debt ceiling drama and successfully navigating the banking tremors.In Asia,Chinas reopening was something of a damp squib,but Japan is back on the investor map.Read on for th
10、e best and worst of 2023 so far.A brief reviewMarket reviewAfter a dismal 2022,equity and bond markets staged a comeback in early 2023.Remark-ably so,as this was despite a flurry of geopolitical headwinds,a banking crisis that has just about been averted(some say postponed),and central banks tighten
11、ing further.The mar-ket recovery has been uneven here are the numbers.Equity regionsThe bestAfter years of lacklustre performance,particularly in USD terms,Japan is back on investors radar screens.In addition to the post-pandemic recov-ery and a cheap currency,corporate reform is in the spotlight,wi
12、th the Tokyo Stock Exchange ordering some companies to submit plans to improve their return on equity.We remain neutral on the market but see selective relative upside.The worstThe Chinese policymakers pledge to rebalance the worlds second-largest economy towards post-pandemic economic growth has no
13、t yet been reflected in equity performance.It will probably take a more accommodative policy to get consumers spending again.Reopening optimism is well priced in.20022YTD5-year annualisedSwitzerland29.98%1.07%19.51%-17.50%4.55%7.38%Eurozone26.05%-3.32%21.54%-9.94%7.47%5.97%USA30.88%19.70%
14、25.75%-20.31%10.05%10.32%Japan18.48%10.23%12.93%-6.45%16.27%7.03%UK16.37%-13.93%15.13%5.33%-0.08%3.31%China24.34%29.49%-19.30%-21.43%-9.07%-7.01%Emerging markets ex.China16.23%12.55%7.87%-19.65%5.95%2.62%7 A brief reviewEquity styles20022YTD5-year annualisedQuality36.08%22.20%23.24%-22.16
15、%14.68%11.50%Value21.75%-1.16%18.42%-6.62%-2.07%4.41%Growth33.68%33.83%19.33%-29.56%19.56%10.48%Large cap27.73%15.94%20.04%-18.31%9.60%8.49%Small cap26.18%15.96%12.09%-19.07%1.08%3.11%Cyclicals31.54%19.30%25.80%-22.40%14.60%9.30%Defensives21.69%1.60%21.70%4.20%-2.50%8.30%High dividend23.15%-0.03%12.
16、07%-4.76%-1.23%5.20%20022YTD5-year annualisedInformation technology47.55%43.77%28.21%-31.26%30.67%17.16%Materials23.35%19.93%12.19%-9.97%-2.33%4.89%Oil&gas11.45%-31.46%37.71%43.77%-10.02%2.42%Industrials27.77%11.68%14.10%-12.79%4.50%5.54%Communications27.39%22.98%13.02%-37.17%25.90%7.11%H
17、ealthcare23.24%13.52%15.52%-4.54%-2.40%9.64%Financials25.51%-2.84%24.80%-10.62%-3.22%3.36%Consumer cyclical26.57%36.62%15.67%-34.61%16.15%7.39%Consumer defensive22.80%7.79%9.85%-6.13%0.52%6.76%Real estate22.96%-4.99%24.11%-24.50%-2.96%0.93%Utilities22.53%4.76%6.09%-4.11%-2.78%6.27%The bestThe outper
18、formance of global growth has been closely linked to the strong performance of selected large-cap information technology and communi-cations stocks.The emergence of artificial intel-ligence(AI)as a major investment theme has benefited growth as an investment style.Disruption tends to be good for gro
19、wth stocks,especially in a low-growth environment such as the one we are cur-rently experiencing.The worstIn an environment of resilient economies and sticky inflation,i.e.high interest rates,defensive stocks tend to underperform.Going forward,we expect defensives to outperform as growth slows and g
20、eopolitical and policy uncertainties increase.Stock-picking is key,as many defensive sectors are challenged by structural trends.Equity sectorsThe bestIt has been quite a year for Information Technology and Communications stocks so far.Superior cash flow generation,credible efficiency measures,and t
21、he rally in all AI-related stocks have boosted both sectors performances.We remain positive,as they should benefit from superior earnings this year and offer relatively high dividend yields and/or share buy-back plans.The worstAfter outperforming strongly during the post-pandemic recovery,structural
22、 headwinds such as the decarbonisation trend and the sectors cycli-cality have been the main drivers of the underper-formance of oil&gas stocks since the beginning of the year.The high exposure to commodity prices,on which we are generally cautious,will continue to weigh on the sectors performance.A
23、 brief review8Fixed income Developed markets20022YTD5-year annualisedUS government bonds6.86%8.00%-2.32%-11.65%2.01%0.59%US TIPS8.43%10.99%5.96%-11.38%2.14%2.64%USD IG corporates14.54%9.89%-1.04%-15.76%2.43%1.56%USD high yield14.32%7.11%5.28%-11.19%3.12%3.09%USD floating-rate notes4.28%1.
24、38%0.52%1.33%2.68%2.17%Emerging markets20022YTD5-year annualisedEM hard currency12.13%7.02%-2.48%-16.24%1.68%-0.08%EM local currency9.47%5.29%-2.53%-8.23%1.26%1.00%The bestUSD-denominated high-yield bonds have benefited from better-than-expected economic activity so far this year.However,
25、we do not expect their outper-formance to continue,as pressure from tightening credit conditions is likely to take its toll on this bond segment,leading to rising default rates.The worstWith a balanced performance across the asset class,emerging market bonds slightly underperformed.The reopening of
26、China,which shows some weak-ness,did not benefit emerging market bonds as much as hoped.We expect the tilt towards quality to intensify going forward but still see emerging market hard-currency bonds as a valuable option among the riskier segments.20022YTD5-year annualisedBrent crude oil2
27、2.68%-21.52%43.61%10.45%-15.42%-1.30%US natural gas-25.54%15.99%49.43%19.97%-49.36%-5.15%Gold18.87%24.42%-5.74%-0.13%7.54%8.59%Silver15.32%47.38%-15.61%2.95%-1.88%7.46%Platinum22.05%10.71%-14.02%11.33%-6.96%1.88%Aluminium-1.84%10.61%34.93%-16.18%-4.55%-0.49%Copper3.32%25.97%25.65%-14.10%-3.50%3.36%I
28、ron ore28.70%70.26%-27.81%-1.08%-5.58%9.76%CommoditiesThe bestRising recession risks and expectations of a rever-sal of monetary policy pushed gold prices towards record highs during the first few months,making it the only commodity with a positive performance.Our Research department sees somewhat l
29、ower price levels ahead,resulting in a cautious view.The worstWhile our Research department has been bearish on natural gas for most of this year,they now believe that the decline in the US market is exaggerated,as prices are below a level that would sustainably bal-ance supply and demand in the lon
30、ger term.This situation could persist in the coming months.Source:Bloomberg Finance L.P.,Julius Baer Investment WritingNote:Please see the Further Information section of this publication for more details on the indices used.Annual performance num-bers are in USD,except for equity regions that are ca
31、lculated in local currency.EM=emerging markets,ex.=excluding,IG=investment grade,TIPS=Treasury inflation-protected securities,YTD=year-to-date numbers are as at the close of business on 31 May 2023.Past performance is not a reliable indicator of future results.Returns reflect all ongoing charges exc
32、luding transaction fees.All investments have inherent risks,and investors may not recover their initial investment.9A brief reviewScoring our callsIn this section,we show how our key investment ideas for the year played out until 31 May 2023.TopicInvestment ideaReturn1FAANMGs2 at a crossroadsMajor p
33、layers in the next growth areas7.52%Attractive yields in fixed incomeInvestment-grade bonds(EUR)2.01%Investment-grade bonds(USD)2.53%Emerging markets hard-currency bonds1.64%Equities after the valuation resetDefensive quality stocks8.33%Energy Transition7.52%Future Cities0.43%Shifting Lifestyles-2.1
34、8%Additional sources of returnHedge funds1.14%Source:Julius Baer Investment Writing1 Return numbers are for the period between 2 January and 31 May 2023.The performance of our calls was evaluated on the basis of the performance of a representative benchmark index that we consider the best fit to our
35、 call.Certain calls may not be reflected due to the lack of an appropriate benchmark.More information on these benchmark indices is shown in the Further Information section of this publication.Past performance is not a reliable indicator of future results.Returns may increase or decrease as a result
36、 of currency fluctu-ations.Returns reflect all ongoing charges excluding transaction fees.All investments have inherent risks,and investors may not recover their initial investment.2FAANMGs=Facebook(Meta),Apple,Amazon,Netflix,Microsoft,and Google(Alphabet)Macroeconomy and strategy Our investment sta
37、nce is to remain fully invested with quality assets.Tighter credit conditions are expected to lead to lower growth,but the West-ern consumer and Chinas growth catch-up are both bright spots.We are not in the doom and gloom camp for the US economy,despite slower growth ahead,and we expect the global
38、economy to be more balanced next year.Inflation is trending lower,although the US Federal Reserve may quietly settle for slightly higher long-term inflation.The dedollar-isation narrative has gained momentum,but we do not subscribe to it.And,finally,structural dynamics favour copper.11 Macroeconomy
39、and strategy Rates are biting,growth is slowingThe year of the cool-down,as we labelled 2023 in our previous outlook,continues,with global growth and inflation slowing.However,central banks are unlikely to change course soon.In fact,it may be 2024 before we see meaningful central bank rate cuts that
40、 are trig-gered by a near standstill in growth and inflation receding to levels acceptable to central banks.We view this as an unusual economic cycle,but with a silver lining for investorsAdvanced economies have so far proved to be remarkably resilient to rapid monetary tightening,even though a slow
41、down is expected later in the year.Indeed,looking back at history,we see that this is not a typical economic cycle.In previous cycles,inflation was driven mainly by excess demand in the private sector and amplified by leveraged bal-ance sheets,with the result that central bank rate hikes were able t
42、o slow economic activity.However,this time supply shocks are the main driver of infla-tion.Furthermore,private sector balance sheets are healthy,and households are still able to draw on the excess savings that they accumulated during the Covid-19 crisis.Hence,overall,advanced economies have proved t
43、o be much less sensitive to higher interest rates than expected.In the case of the US,this resilience prompted the US Federal Reserve to raise its policy rate faster and further than it has in a generation,with the knock-on effect that equities and bonds fell in tandem in 2022 for only the third tim
44、e since 1926.Bonds even expe-rienced their worst performance on record,as inter-est rates rose relentlessly.However,every crisis has its silver lining,and this one is that long-term return expectations in equities and bonds are now much higher,while the expected volatility has not changed significan
45、tly across investment profiles.We remain fully investedThe year of the cool-down favours being fully invested with a focus on quality assets.Some may ask:Why not hold excess cash when growth slows?For one thing,inflation is still real and erodes the purchasing power of cash.Moreover,markets tend to
46、discount looser monetary policies(e.g.lower rates)via higher asset prices well ahead of central bank announcements.At that point,excess cash has to be invested at much higher equity and lower bond-yield levels.Lastly,with equities and,espe-cially,bonds providing a good source of income again,it is t
47、ime to lock in these juicy yields con-trary to 2022,the 60(equities):40(bonds)portfolio is back in fashion.Research FocusTo learn more about the key macroeconomic trends as well as our views across asset classes for the remainder of the year and beyond,please read the Research Focus:Market Outlook M
48、id-Year 2023.Macroeconomy and strategy 12We expect global growth divergences to diminish,stabilising growth overallMonetary tightening in the Western world is reach-ing a level that is likely to have repercussions later this year,as our Research department expects credit to become increasingly scarc
49、e in both the US and Europe.On a regional basis,this means that US economic growth is likely to cool off more than elsewhere after being a growth stronghold for the past two years.At the same time,China is play-ing catch-up after its reopening,and would need accommodative policies to support a nasce
50、nt recov-ery.Europe,on the other hand,has a fair chance of bucking the economic slowdown trend of the US due to Chinese demand,and lower energy prices help to sustain this,thereby offsetting monetary tightening on the continent.Such counterbalancing trends in global economic growth make a global rec
51、ession unlikely.We are not in the doom and gloom camp for the US economyThe restrictive US monetary policy and tighter credit conditions are likely to lead to slower growth,and possibly even a contraction,of the US economy in the first half of 2024.This is nothing new,as the US economy already exper
52、ienced two quarters of neg-ative growth in 2022;yet the US economy still grew by 2.1%for the year.In any case,the outlook is not all doom and gloom.The absence of major imbal-ances argues against the growth slowdown becom-ing a full-blown recession on the scale of those seen in 2001 or 2008.In other
53、 words,Western house-holds are conservatively financed,companies have not overinvested,and the US labour market remains strong.Furthermore,the challenges faced by the commercial real estate sector are not great enough to derail the strong US consumption trends,nor is the crisis at US regional banks,
54、although these areas bear close watching as the year progresses.Households to the rescue as growth fadesRecessionEuropean UnionUnited States20062023TighterLooserFinancial conditions0%14%20202023United StatesEurozoneExcess savings rateSource:Macrobond,Julius Baer Investment&Wealth Management Solution
55、sNote:The excess savings rate is shown as a percentage of disposable household income.Financial conditions:For the US,data from the National Federation of Independent Business(NFIB)on the expected credit conditions based on an average of the next three months was used.A rising line means that an inc
56、reasing number of firms surveyed consider that credit is hard to get.For the European Union,a survey commissioned by the European Commission was used.It measures to what extent companies claim that finances are a limiting factor in their business activity.A rising line means more companies see their
57、 financial conditions as limiting their activity.Macroeconomy and strategy VideoPlease watch our Market Outlook Mid-Year 2023 video with Christian Gattiker,our Head of Research,to see what we expect for the economy and key asset classes.We expect lower inflationHigher economic activity in the first
58、half of the year has led to a slower-than-expected decline in inflation in the advanced economies.Nevertheless,the trend towards lower inflation remains in place.One sim-ple data point says it all:US annual inflation fell for an unprecedented ten consecutive months up until April 2023.Going forward,
59、tighter monetary policy,tighter credit conditions,lower commodity prices,and less obstructed trade flows will continue to release the inflationary pressure valve.US inflation averaged 8%in 2022 but is likely to be around 4%in 2023,with inflation easing even further next year.When central banks lower
60、 interest rates,stock and bond markets will have already priced this in long beforehand,and cash will have to be invested at much higher equity and lower bond-yield levels.Christian Gattiker,Head of Research Macroeconomy and strategy SpecialOn inflation,the US dollar,and commoditiesIn this section,w
61、e take a deeper look at current talking points in financial markets.Longer-term inflation:3%is the new 2%The US Federal Reserves official long-term infla-tion target stands at 2%in order to fulfil its mandate for maximum employment and price stability.As of April 2023,US inflation was running high,a
62、t around 5%,well above the central banks own target,while the unemployment rate was still at the historically low level of around 3.5%.According to a recent study by the Cleveland branch of the US Federal Reserve,achieving this 2%inflation target on a sustainable basis would imply a deep recession,p
63、ushing the unemployment rate up to 7.4%.The working paper concludes with a welfare analysis which shows that keeping inflation higher for longer and avoiding a painful contraction in economic activity would be the optimal policy.Thus,the US Federal Reserve is likely to quietly accept structurally hi
64、gher inflation of 3%,while carefully balancing its rhetoric along the way.Drivers of sup-ply friction that are inflationary include the labour market,geopolitics,and the need to decarbonise the global economy.Importantly,with the next US presidential election less than 18 months away,a sharp rise in
65、 unem-ployment would be untenable for the incumbent Democrats.In such circumstances,political consid-erations may find their way into the decision-making framework of central banks and policymakers.In other words,from the Democrats point of view,a little more inflation is much more desirable than th
66、e 15 Macroeconomy and strategy Republicans,let alone former President Trump,win-ning the next election and taking over the White House again.The US dollar:The reports of my death are greatly exaggeratedThis is what Mark Twain wrote after his obituary was mistakenly published.The US dollar can tell a
67、 similar story,as every now and then forecasts of its immi-nent demise hit the headlines.In recent months,this narrative has been fuelled by news of non-USD trade deals led by China and other countries that are looking to mitigate the impact of any US sanctions by reducing their greenback exposure.H
68、owever,the importance of the US dollar as a transaction/hedg-ing currency for businesses and as a reserve currency for central banks has not changed that much over the past 20 years.Even so,being a major reserve currency is not the same as being a store of value.The Swiss franc,which is not a major
69、reserve currency but is a beneficiary of safe-haven flows,has been the strongest-performing currency over the past half a century.In fact,exposure to strong curren-cies is like owning high-quality stocks or bonds;it makes a portfolio more resilient.Nevertheless,USD-denominated assets are structurall
70、y too attrac-tive to ignore due to the vast number of highly liquid attractive investment choices and market-leading companies.In addition,the US dollar benefits from the US being a large and stable economy that provides strong property rights and has a power-ful military capable of protecting its e
71、conomy and institutions.However,there is also the cyclical perspective.On that front,some more US dollar weakness may be in store as it loses its growth and interest-rate advan-tage.This,in turn,increases the attractiveness of non-USD-denominated assets,particularly the safe-haven Swiss franc and Ja
72、panese yen.Dedollarisation:A diversification rather than a USD demise%of transactionsUSDEURJPYGBPCNYCADAUDCHF007080902000192022Source:Bank for International Settlements(BIS),Macrobond,Julius Baer Investment&Wealth Management Solutions Note:Triennial survey of foreign
73、-exchange and over-the-counter(OTC)derivatives markets.Only currencies with a current volume 2%are displayed.The US Federal Reserve will settle for 3%annual inflation but not admit to it.Yves BonzonGroup CIO INVESTMENT INSIGHTS APPMarkets are always moving.So are busy investors.Enjoy our latest awar
74、d-winning research and market news from around the world.APPLEGOOGLE19 Macroeconomy and strategy Commodities:A foot in the door with regard to copperOur Commodities Research department does not believe that a general commodity super cycle is in the making,as the fading impact of a combination of pan
75、demic,weather,and political shocks,in conjunc-tion with Chinas structural challenges,is resulting in a more balanced supply/demand situation.However,our analysts believe that copper is an exception due to its promising longer-term out-look.Up to now,China has been the main demand driver for copper,b
76、ut the energy transition is tak-ing over,as copper is an important commodity for many renewable infrastructures.On the supply side,our analysts note that growth has been slowing due to a lack of investment in new copper mines.This view is shared by many large mining companies that have been expandin
77、g their copper footprint through acquisitions this year due to the favourable demand/supply outlook for copper in the longer term.Our Commodities Research department projects struc-tural undersupply in the copper market by the mid-dle of this decade,which should lead to much higher future price leve
78、ls.Copper:Demand to exceed supply Supply(including forecast)Demand(including forecast)Million tonnes540520025203020352040Undersupply leading to higher pricesTodaySource:International Copper Study Group,World Bureau of Metal Statistics,Julius Baer Next Generation Rese
79、arch Note:Actual data available until the end of 2021.Interested?Please contact your Julius Baer representative for further information on products that best suit your needs.Fixed incomeIn our opinion,a conservative but fully invested stance should be taken in any investment strategy.What does this
80、mean for your fixed income portfolio?Quality issuers should be sought out,and decent real yields should be locked in whilst they remain posi-tive.High-yield bonds are best avoided because of the risk that default rates might increase markedly.Nevertheless,one area of higher credit risk that is still
81、 very much on our investment radar is emerging mar-ket bonds,where the picture is much rosier in relative terms.21 Fixed incomeHigher income for less riskOur bond menu for the second half of the year consists of shorter-dated low-investment-grade bonds,longer-dated investment-grade(quality)bonds,and
82、 hard-currency-denominated emerging market bonds.We started this year cautiously optimistic that the perfect storm we saw in the bond markets in 2022 could be reversed.However,we also warned that central bank communication could spell trouble in the shorter term until policymakers receive sufficient
83、 evidence that inflation has slowed.Furthermore,it is taking more time than expected for the fall in infla-tion to kick in with higher economic activity result-ing in inflation rates falling slower than anticipated so far in 2023.The current bond universe offers more opportun-ities than we have seen
84、 in a while for constructing a robust,yield-generating fixed income portfolio.However,as we reach the end of the interest rate tightening cycle,investors will likely focus on the consequences of slowing growth,which means that the opportunity to benefit from higher yields will have passed.Overall,we
85、 are sticking to our strategy from the start of 2023 and are not adding substan-tial developed market credit risk to our portfolios at this juncture.So what should investors buy now?The yields of shorter-dated low-investment-grade bonds are ele-vated given the current restrictive policy rates,mak-in
86、g them an attractive investment opportunity,and we still believe that longer-dated investment-grade(quality)bonds could play a crucial role as diversifiers that offer a decent compensation.What is on our bond menu?High-yieldOFF THE MENUShorter-datedlow-investment-gradeLonger-datedinvestment-grade(qu
87、ality)Emerging markethard-currency-denominatedBOND MENUBOND MENUSource:Julius Baer Investment&Wealth Management SBEYONDMARKETSNot enough time to read investment research?We hear you.Tune in to our Beyond Markets podcast series to get our expert views and strategic inputs on market developments andin
88、vesting trends from around the globe.APPLESPOTIFY23 Fixed incomeMoreover,we are allocating our credit risk budget to hard-currency-denominated emerging market bonds due to expectations of a peak in US inflation,the subsequent slowing pace of rate hikes,and the anticipation of US Federal Reserve inte
89、rest rate cuts.Shorter-dated low-investment-grade bondsThe higher yields provided by shorter-dated low-investment-grade bonds(BBB)can help to increase the income in portfolios,since they offer investors the opportunity to continue reinvesting the higher coupons(thereby increasing the so-called carry
90、).We are therefore maintaining our Over-weight rating for EUR-and USD-denominated bonds in that segment.In the eurozone,we see room for rating improvements in peripheral sovereigns with low-investment-grade ratings(e.g.Spain and Italy)and favour these over expensive core eurozone sovereign debt.Long
91、er-dated investment-grade(quality)bonds Bond investors need to think about how redemp-tions can be reinvested over time.Ultimately,as the name suggests,a short-maturity bond only gives you certainty over a short horizon.However,invest-ing in longer-dated bonds offers the opportunity to lock in yield
92、s over an extended period of time.The closer we come to the end of the interest rate hiking cycle(we believe the US will deliver its first rate cut in December 2023),the more imminent the rein-vestment risks become.Investing in longer-maturity bonds limits the risk that investors will be flush with
93、cash from maturing bonds over the next two years at a time when the opportunity set of the bond markets might not offer the same yield levels anymore.The longer average maturity of higher-rated segments reduces reinvesting risks significantly.Hard-currency-denominated emerging market bondsExpectatio
94、ns of a peak in US inflation,the subse-quent slowing pace of rate hikes,and the anticipa-tion of US Federal Reserve interest rate cuts should prove beneficial for investors looking to invest in emerging markets again.We believe that this will set the stage for the resumption of investment flows into
95、 this segment.Once inflation is on a consist-ently declining path,emerging market central banks will also likely embark on an easing cycle.Emerging market bonds historically perform well in periods of stable or falling US interest rates and USD weak-ness.In addition,we expect emerging market bonds H
96、igh-quality bonds offer decent yields,especially by post-Global-Financial-Crisis standards02468006200920021%US investment-grade yieldAverage(+/-1 standard deviation)Source:Bloomberg Finance L.P.,Julius Baer Fixed Income ResearchNote:Data as at 01.05.2023.Past performance and pe
97、rformance forecasts are not reliable indicators of future results.The return may increase or decrease as a result of currency fluctuations.Fixed income24to benefit from the expected acceleration of Chi-nas economy from 3%in 2022 to 5.6%this year.It should be kept in mind that Asian corporate bonds a
98、ccount for almost half of the emerging market benchmark indices,and the performance of Asian corporate bonds is highly correlated with Asian eco-nomic activity.Within Asian bonds,however,our focus remains on the higher-quality segments.This is due to the fact that the Chinese government is not provi
99、ding support for its ailing real estate corporate sector,which is in line with its previous statement that housing is for living and not for spec-ulation.In addition to Asian high-grade bonds,we also like Middle Eastern high-grade bonds given that they benefit from a high level of energy export reve
100、nues.High-yield bonds are off the menu for now Concerns about the rising likelihood of defaults led us to downgrade high-yield bonds in Q2 2023.Since the US Federal Reserve embarked on its fight against stubbornly sticky inflation,financial con-ditions have tightened considerably.As a conse-quence,t
101、he unprofitable and/or financially less stable companies in the high-yield segment have experienced more stress.Such companies,by defini-tion,not only have higher credit costs but also usu-ally have shorter liability maturities.This means that increasing refinancing costs translate more quickly into
102、 higher actual costs.A potential negative feed-back loop between credit availability and economic activity could put further pressure on weaker bal-ance sheets,but the credit spreads of riskier seg-ments do not reflect such an adverse scenario at this point.We would therefore not invest in this segm
103、ent at this juncture.Swiss franc bonds:A safe havenOur analysts see multiple reasons for holding CHF-denominated corporate bonds as a viable portfolio diversification strategy:We expect more Swiss franc strength in the medium term.Historically,Swiss franc bond yields have been more stable than euro-
104、denominated ones.The Swiss bond market tends to benefit when other markets are under pressure.CHF-denominated corporate bonds offer promising prospects for investors seeking stable returns.As the global bond market undergoes a transformation,investors are seeking stable returns amidst market volatil
105、ity and fiscal uncertainty.Switzerland is known for its disciplined fiscal policy and low inflation rates,which makes it a compelling option for investors seeking a safe haven for their investments.Nevertheless,a key factor for investors looking to park their money safely in Switzerland is that such
106、 security comes at a price.There is a trade-off between risk mitigation and potential returns in that such returns are stable but lower than those offered by investment-grade debt in the eurozone.VideoIf you would like to know why now is the time to lock in attractive bond yields,please watch this v
107、ideo.EquitiesWith growth scarcity back in the headlines,we are maintaining our call to focus on defensive industry leaders across various sectors.We are also looking for quality growth companies that have attractive valu-ations,strong balance sheets,and high margins and cash flows.Within the Next Ge
108、neration framework,we are currently highlighting the Shifting Lifestyles and Artificial Intelligence themes.Equities26The comeback of quality growthWhen uncertainty spiked again as a result of the banking sector turmoil in March of this year,investors flocked to the defensive corners of the market.A
109、lthough we believe that the crisis of confidence in the banking sector will eventually be contained,we currently still favour defensive stocks,as well as quality growth stocks.Maintain a defensive tiltThis year started positively for equity markets,but the rally came to an abrupt end when banking se
110、c-tor woes emerged.The turmoil among midsized US banks and the rise in global interest rates have resulted in credit conditions tightening.This is likely to lead to a slowdown in growth towards the end of 2023 and the start of 2024 and might even result in a contraction of economic activity.In the c
111、ur-rent environment,we would maintain a defensive tilt within equity portfolios and continue to focus on quality growth stocks.One sector that we particu-larly like is communications.In Asia,we see oppor-tunities in Southeast Asia,India,and Japan.Not all defensives are equalWith growth set to slow,d
112、efensive companies should fare better than the broader market,and their shares should also be less volatile.However,not all defensives are equal.Our preference is for defensive stocks in attractive markets and/or those that can grow by gaining market share.We have identified Where to look for attrac
113、tive opportunitiesSelect areasin AsiaShiftingLifestyles/AIQualitygrowthAttractivedefensivesSource:Julius Baer Investment&Wealth Management Solutions27 Equitiesseveral areas where such companies can be found:casual dining,personal care,alcoholic beverages,food retail,healthcare,tower communications,a
114、nd utilities.Quality growth stocks at attractive valuationsThe 12-month forward price-to-earnings ratio for the quality growth segment is back at the ten-year average level.Within the segment,we would focus on companies with solid balance sheet character-istics,coupled with high margins and cash flo
115、ws.These companies should do well in an environment of peaking inflation and lower bond yields.While quality growth stocks can be found across various sectors,they are overproportionately represented in the information technology and communications sectors.VideoPlease watch our video to learn more a
116、bout which defensives are attractive.Communications:A good call After significantly underperforming the broad equity market over the last 12 months,the communications sector now offers a compelling entry opportunity.The sector covers a fairly diverse array of companies,but the two most important sub
117、groups are(1)internet and digital advertising companies and(2)traditional telecommunications operators.Within the former subgroup,some of the large online growth companies were negatively impacted by the cyclical nature of the advertising market and were the main reason for the sectors disappointing
118、 performance in 2022.However,the latest quarterly results have confirmed the bottoming trend for the online advertising market.Some giants in the space are still trading in line with or even at a discount relative to the market,which is not justified in our view.We see further upside for some of the
119、 industrys large-capitalisation names,and if the firms follow through with cost and capital expenditure reductions,then earnings growth should accelerate and the stocks should perform well.With regard to traditional telecommunications operators,although the growth prospects for these firms are lackl
120、ustre,growth should be stable.Furthermore,these companies tend to benefit from resilient earnings in an economic downturn and thereby offer good value and stability in a challenging economic environment.Overall,the communications sector is expected to deliver superior earnings in 2023.Within the sec
121、tor,we would focus on the large-capitalisation digital advertising companies in the US and traditional telecommunications operators in Europe.The additional credit tightening will likely impact economic activity down the road,making the case for defensive and quality growth stocks.Mathieu RacheterHe
122、ad of Equity Strategy ResearchEquities30A closer look at AsiaThe improving market backdrop in Asia should provide attractive opportunities for emerg-ing market equities in the second half of the year.For the time being,we are sticking to our Overweight views on Southeast Asia and India.Elsewhere,the
123、re is still value to be unlocked in the developed market Japan.Remaining cautious on emerging market equitiesEmerging market(EM)equities have performed rather poorly so far this year,weighed down in par-ticular by weak earnings and downward earnings revisions.Given the prevailing risk-averse investo
124、r sentiment,we believe the outlook remains challeng-ing and therefore remain cautious on EM equities for the time being.However,in our view,they have the potential to catch up and offer attractive entry opportunities in the second half of the year,as a weaker US dollar,policy easing,and Chinas recov
125、ery should provide significant tailwinds.Within emerging markets,our focus is on Southeast Asia and India.Given the heterogeneous nature of EM equities,we expect equity market performance to diverge across regions and thus continue to recommend a selective approach.Our focus is on Southeast Asia and
126、 India,where we are Overweight.Southeast Asian equities stand out given their defensive nature,supportive gross-domestic-product and earnings-per-share growth,and robust balance sheets.India,meanwhile,should benefit from favourable economic policies,and the composition of its private sector supports
127、 the countrys long-term structural growth.Chinas recovery stallsIn China,the largest emerging market,the latest economic data shows that the positive momentum that developed after the reopening of the econ-omy has weakened.There was a sharp slowdown in April,and the trend continued in May.The soften
128、-ing across key economic sectors impairs the growth outlook of the Chinese economy for the coming months.While both the property sector and the industrial sector have been quickly losing steam,the services sector remains the bright spot but this has also slowed meaningfully.We maintain a Neu-tral ra
129、ting on China and continue to advocate a stock-picking strategy.PodcastListen to our Beyond Markets Podcast on the reopening and reforms in Japan and what they mean for investors.EquitiesJapan:A diversifying opportunityGiven the uncertainties related to investing in China,some investors are now turn
130、ing their attention to alternatives elsewhere in Asia,including Japan.One of Japans positive attributes is its size.It is not only the worlds third-largest economy but also has the third-largest financial market,making it one of the major beneficiaries of Asias growth dynamics.Japan is currently exp
131、eriencing a post-pandemic recovery,and both industrial production and services activity are expected to recover steadily,implying solid growth in the coming quarters.There is still value in Japanese equities that can be unlocked by investors.Valuations remain attractive at current levels,while the m
132、arket is enjoying the accommodative monetary policy of the Bank of Japan(BoJ),coupled with higher inflation.Indeed,inflation is driving earnings upwards(in nominal terms),while the absence of a central bank tightening cycle is lifting pressure on both valuations and economic activity.Nevertheless,th
133、e equity market remains highly dependent on the BoJs actions(or inactions),as well as the moves of the Japanese yen especially with regard to a pivot of the central banks dovish stance,which could widen or even abolish its yield curve control band,and this would likely put equities under some pressu
134、re.Considering that the Japanese stock market is not expensive on either a net-asset basis or an earnings basis and that it is home to many companies that are world leaders in their industries,we believe that investors could consider certain Japanese equities with quality and growth characteristics
135、that provide an attractive diversification opportunity without the geopolitical turmoil.EquitiesNext Generation:Resilience and disruptionIn this interview,Carsten Menke,the Head of Next Generation Research,explains why Shifting Lifestyles themes are now attractive,as cyclical challenges are intensif
136、ying.He also shares his views on the artificial intelligence race and the far-reaching disruption it is causing in some sectors.For our Market Outlook Mid-Year 2023,you high-light two themes:Shifting Lifestyles and Artificial Intelligence.Could you please start by explaining these in more general te
137、rms?Shifting Lifestyles is one of our seven overarching Next Generation themes.It explores the conse-quences of todays significant demographic shifts for investors.Almost everywhere across the globe,soci-eties will face sustained challenges in their health-care,welfare,elderly care,and education sys
138、tems.The consequences are extensive,impacting public finances and pension structures,as well as housing and labour markets.Artificial Intelligence(AI),along with Cloud Com-puting,is one of the investment subthemes related to our overarching theme of Digital Disruption,which explores the ongoing digi
139、tal revolution,its impact on societies and economies,and the related opportunities and challenges.AI,specifically,aims to make machines smarter and more useful,thereby increasing their efficiency and output.This can give those companies that use it wisely a competitive edge,better insights into cust
140、omer needs,and,ulti-mately,increased revenues or reduced costs.Why do you like Shifting Lifestyles now,and which of the subthemes do you like the most?Against the backdrop of a challenging cyclical out-look,we believe that our Shifting Lifestyles themes are resilient and offer attractive structural
141、growth,as they generally exhibit a lower sensitivity to global equity market movements,thereby providing a more conservative exposure to structural growth.In addi-tion,the valuations are around historical averages,which means that investors are not overpaying any-more for the embedded growth potenti
142、al.We particularly like the subthemes of Digital Health,Extended Longevity,and Genomics,as we believe that their long-term outlook remains very compel-ling,factoring in both the development of demo-graphics and the technological advances in these segments.More recently,we have witnessed break-throug
143、hs in age-related diseases,like Alzheimers and type-2 diabetes,which underpin our positive view on these topics.33 EquitiesThe topic of AI has clearly gained momentum this year.What is your take on this?Since the launch of ChatGPT late last year,AI has been one of the hottest topics in science,soci-
144、ety,the economy,and equity markets.One of our long-standing convictions is that AI will become a general-purpose technology that will be applied across many sectors and industries,leading to dis-ruption in numerous areas.This years developments clearly show that AI will be an opportunity for some co
145、mpanies and a threat for others.For now,we believe the AI race has only just begun and expect an acceleration in the rate at which new AI-powered products and services are announced.We continue to favour software companies with pro-prietary data,the semiconductor value chain,and cloud infrastructure
146、 providers.Despite the recent rally,their valuations are below historical aver-ages,and they continue to offer compelling growth characteristics.PodcastListen to our Beyond Markets Podcast on the growth of AI and what it means for investors.Beneficiaries of a surge in the growth of AIChipmakers and
147、semiconductorequipment companiesSemiconductorsCompanies offering cloud servicesCloud computingSoftware developers and first moversAI enablers and adoptersAISource:Julius Baer Next Generation ResearchThe promise of relative value investingIn a world of low(or slowing)growth and increased volatility,i
148、nvestment styles designed with the aim to deliver positive performance regardless of the invest-ment environment have begun to attract inflows again.Relative value strategies try to identify assets that are mispriced relative to others,enabling invest-ors to profit from perceived market inefficienci
149、es.35 The promise of relative value investingThe comeback of hedge fundsThe potential of positive returns in any situation is one of the explanations for the attract-iveness of alternative investment products such as hedge funds.With inflation sticky,growth scarce,and volatility up,investors have re
150、discovered such strategies.Market volatility and relative value investing2022 ushered in a paradigm shift in terms of infla-tion,growth,and market volatility.Now that vol-atility is back and active managers can exploit the market inefficiencies that result from it,alternative investments are again a
151、 great diversification ele-ment for a portfolio.This is one of the reasons why after years of cheap cash and next to no market volatility,during which hedge funds provided unex-citing returns overall,they have now started attract-ing inflows again.Hedge funds have the ability to behave in more or le
152、ss uncorrelated ways to the beta(i.e.direction)of the markets and have much to offer in the current environment.We recently spoke to our hedge fund specialists and asked them which of the six available hedge fund strategies they see as especially apt for the present investment environment.They repli
153、ed unanimously:relative value.The goal of relative value managers is to identify assets that are mispriced relative to others,thereby generating performance that is independent of the general direction of the mar-ket and thus resulting in the isolation of alpha,or outperformance.Relative value strat
154、egies identify assets that are mispriced relative to othersBA.anticipating that historical valuation ratios hold over time.and go short overvalued asset Bat the same time.Go long undervalued asset A.Source:Julius Baer Investment&Wealth Management SolutionsThe promise of relative value investingPerfo
155、rmance essentialsAlpha()is a term used in finance to refer to an investment strategys ability to beat the market.Alpha is thus also often referred to as excess return in relation to a benchmark,when adjusted for risk.Beta()is a term used in finance to measure the expected move of an asset relative t
156、o movements in its benchmark.A beta greater than 1 indicates that the asset is more volatile than the broader market,while a beta smaller than 1 indicates that the asset is less volatile than the broader market.Volatility()is a measure of the(likely)extent and pace of price moves over a given time s
157、pan.In the stock market,increased volatility is often a sign of fear and uncertainty among investors.Source:Julius Baer Investment WritingThe promise of relative value investingRelative value investingInterview with Adrienne Jaersvall,Head of Fund Advisory at Julius BaerWhat exactly is relative valu
158、e investing?Relative value strategies are trading strategies that exploit any(perceived)mispricing in financial mar-kets between assets of the same or related types.In its purest form,relative value investing can be true(risk-free)arbitrage.In other words,to capitalise on the mispricing of assets,in
159、vestment managers take long positions in the undervalued assets and short positions in the overvalued assets in the expectation that prices will return to their fundamental values.Thereby,managers seek to make a profit regardless of the underlying direction of the markets.In gen-eral,I think it is f
160、air to say that relative value man-agers are driven by a mean-reversion mindset of sorts,i.e.they believe that the historical relationships between financial assets will also hold in the future.That sounds like an all-weather strategy that should work well in any investment environment.So why should
161、 investors get involved today what are the triggers?I am not a fan of the term all weather,as there are no guarantees for positive performance.In terms of timing,however,there are two factors to consider.Firstly,looking back,we have just lived through a decade-long bull market with relatively low vo
162、la-tility,where hedge fund performance was,for the most part,unexciting.As a result,the reputation of hedge funds suffered,and this led investors to neglect this type of investment strategy for a long time.Put slightly differently,hedge funds became a niche investment that forced managers to allo-ca
163、te(scarce)resources more prudently than was the case for other,more hyped,kinds of alterna-tive investments.Secondly,looking ahead at the economic cycle,we see that growth is slowing and MOVINGMARKETSWant to know whats moving markets today?Tune in to Moving Markets,our daily podcast series where our
164、 experts discuss the latest market developments and put the headlines in perspective to set you up for the coming day.SPOTIFYAPPLEGOOGLE39 The promise of relative value investinginflation remains rather sticky,moving only slowly back towards levels that central banks are willing to accept.While ther
165、e is upside in some parts of the equity market,the rally lifting stock prices across the board is likely to run out of steam over the coming months.The odds of falling prices and higher volatil-ity in the markets have therefore increased substan-tially.And this is precisely the environment in which
166、relative value strategies tend to outperform those assets that move in line with the broader markets.Understood,but higher volatility can come from sev-eral sources,including interest rate levels,individual sector/stock risk,and,more broadly,a credit crunch(where the availability of money suddenly d
167、eclines),escalating geopolitical tensions,the impact of nat-ural disasters,or,of course,another pandemic.How can relative value strategies protect investors from specific sources of volatility?In relative value strategies,managers construct portfolios that are neutral to changes in the over-all mark
168、et(systemic risk)in the first place and,depending on the strategy,to specific factors(such as small-cap,growth,or cyclical stocks)to eliminate factor risks too.Their aim is to remain unexposed to directional risk,i.e.the risk caused due to movement in stock prices,interest rates,etc.,and to take adv
169、an-tage of any(small)mispricing in specific assets.To achieve attractive returns,managers typically use high leverage to compensate for the low returns generated by individual trades.Ensuring true market neutrality is a challenge,and I need to manage expectations here.While managers use the latest t
170、echnology to hedge systemic and fac-tor risks in real time,it often comes at the expense of tail risk.Consider a completely unexpected(or tail)event that derails financial markets:while you may be comparatively better off with a relative value strategy,its high leverage can magnify losses if mar-ket
171、s fail,for example in a sudden liquidity crunch.Higher volatility leads to higher alpha of relative value strategiesZ-score value*3-year rolling alpha of HFRI Equity Hedge TR index vs MSCI World TR USD index3-year rolling average level of the VIX volatility index-3-2-00720023So
172、urce:Bloomberg Finance L.P.,Julius Baer Fund OfferingNote:Data as at 30.04.2023,in USD,net of fees.*Z-score measures the number of standard deviations a value is from the mean.TR=total return.Past performance and performance forecasts are not reliable indicators of future results.The return may incr
173、ease or decrease as a result of currency fluctuations.The higher the volatility in financial markets,the better the prospects for investment styles oriented towards relative value.Adrienne JaersvallHead of Fund AdvisoryThe promise of relative value investingTwo examples of relative value investingCo
174、nvertible arbitrage At the low-risk end of the spectrum are true arbitrage opportunities.These are rare,but they offer the opportunity to profit with virtually no risk and are therefore a preferred type of activity.Executing this type of strategy,investors countertrade convertible bonds and the unde
175、rlying shares of the same issuer at the same time,allowing them to take advantage of temporary discrepancies in the valuation of different securities of the same company.Merger arbitrageThis is one of the strategies our specialists are particularly excited about in the current environment.Essentiall
176、y,merger arbitrage attempts to capture the spread between the price at which a target company trades after a deal is announced and the price the acquirer has offered to pay for the target company at the time the deal is completed.Investors can make a profit by successfully assessing whether the deal
177、 will close at the announced price.The main risk of the strategy is therefore that the deal fails.Even Warren Buffett,famous as a value investor and notoriously unenthusiastic about hedge funds,is an investor in such deals.43 The promise of relative value investingSpecialThe six core hedge fund stra
178、tegiesThe table below provides a brief explanation of the six core hedge fund strategies and our specialists view on them.Strategy and its variationsOur specialists viewWhat it isEquity long/shortInvesting in both long and short positions in equity securities.FundamentalUnderweightSeeks to take a lo
179、ng position in underpriced stocks while short-selling overpriced stocks.Opportunistic tradingOverweightSeeks to profit from inefficiencies and dislocations in financial mar-kets at a macroeconomic,market sector,single-stock,factor,or foreign exchange level.Event-drivenInvesting in companies undergoi
180、ng corporate events such as mergers,spin-offs,and bankruptcies.ActivismUnderweightSeeks to exploit pricing inefficiencies that may occur before or after a corporate or news event.Distressed creditNeutralSeeks to identify credit securities where there is a near-to-medium-term event such as an asset s
181、ale,refinancing,or merger,or where an operational or financial turnaround is anticipated.Merger arbitrageOverweightSeeks to exploit market inefficiencies before or after a merger or acquisition.Special situationsNeutralSeeks to exploit opportunities that arise throughout a companys life as a result
182、of extraordinary,or special,corporate events.Relative valueInvesting in securities from the same or a highly comparable issuer that are mispriced relative to each other.Capital structure arbitrageOverweightSeeks to profit from the relative mispricing across different security classes from the same c
183、ompanys capital structure.Convertible arbitrageNeutralSeeks to profit from a pricing discrepancy between a companys con-vertible bonds and its underlying stock.Fixed income relative valueOverweightSeeks to profit from relative value dispersions of credit instruments with the same or similar risk pro
184、file.Volatility arbitrageOverweightSeeks to profit from the difference between the forecasted future price volatility of an asset and the actual price paid.Quantitative equityNeutralAlso known as data-driven investing,seeks to identify pricing(mean-reversion)relationships and capitalise on them.The
185、promise of relative value investing44TradingInvesting in both long and short positions in financial markets based on a top-down view of global markets.CommoditiesOverweightSeeks to generate returns in commodity markets using technical ana-lysis and fundamentals.It is a non-benchmark-based approach.D
186、iscretionaryOverweightSeeks to generate returns across asset classes using technical analysis and fundamentals.It is a non-benchmark-based approach.SystematicNeutralSeeks to generate returns using algorithmic trading programmes,also known as methodical trading.Credit/incomeInvesting in debt securiti
187、es and other income-producing assets to generate income and capital appreciation.Credit long/shortNeutralSeeks to generate profit from combining straight bonds and hedge overlays(mainly hedging credit risk and interest rate risk).Structured creditNeutralSeeks to create value from pools of various(il
188、liquid)loans.Reinsurance/insurance-linked securitiesNeutralSeeks to earn returns from exposure to reinsurance catastrophe risks.Multi-strategy Multi-strategy-oriented hedge funds seek to generate income by mixing some or all of the main hedge fund investment styles.Source:Julius Baer Fund Offering,J
189、ulius Baer Investment WritingInterested?Please contact your Julius Baer representative for further information on products that best suit your needs.Strategy and its variationsOur specialists viewWhat it isFurther information46Further informationFurther informationPlease find below further informati
190、on on benchmarks and indices used in the review sec-tion of this publication.Market ReviewEquity regionsRegionIndexEmerging markets excluding ChinaMSCI Emerging Markets excluding China Net TR USDSwitzerlandMSCI Switzerland NR CHFEurozoneMSCI Europe Net TR EURChinaMSCI China Net TR USDUSAMSCI USA Net
191、 TR USDJapanMSCI Japan NR JPYUKMSCI United Kingdom NR GBPEquity stylesStyleIndexQualityMSCI World Quality Net TR USDValueMSCI World Value Net TR USDGrowthMSCI World Growth Net TR USDHigh dividendsMSCI World High Dividend Yield Net TRCyclicalsMSCI World Cyclical Sectors TR USDDefensivesMSCI World Def
192、ensive Sectors TR USDSmall capsMSCI World Small Cap Net TR USDLarge capsMSCI World Large Cap Net TR USDEquity sectorsSectorIndexInformation technologyMSCI World Information Technology Net TR USDMaterialsMSCI World Materials Net TR USDOil&gasMSCI World Energy Net TR USDIndustrialsMSCI World Industria
193、ls Net TR USDCommunicationsMSCI World Communication Services Net TR USDHealthcareMSCI World Health Care Net TR USDFinancialsMSCI World Financials Net TR USDConsumer cyclicalMSCI World Consumer Discretionary Net TR USDConsumer defensiveMSCI World Consumer Staples Net TR USDReal estateMSCI World Real
194、Estate Net TR USDUtilitiesMSCI World Utilities Net TR USDNote:NR=net return,TR=total return47 Further informationFixed incomeSegmentIndexUS government bondsBloomberg US Treasury Total Return Unhedged USDUS TIPSBloomberg US Treasury Inflation Notes TR Index Value Unhedged USDUSD investment-grade corp
195、orate bondsBloomberg US Corporate Total Return Value Unhedged USDUSD high-yield bondsBloomberg US Corporate High Yield Total Return Index Value Unhedged USDUSD floating-rate notesBloomberg US Floating Rate Notes TR Index Value Unhedged USDEM hard-currency bondsBloomberg Barclays EM Hard Currency Agg
196、regate TR Value Unhedged USDEM local-currency bondsBloomberg Barclays EM Local Currency Government TR Unhedged USDCommoditiesCommodityFutureBrent crude oilGeneric 1st CO Future,ICE Futures Europe CommoditiesUS natural gasGeneric 1st NG Future,New York Mercantile ExchangeGoldGeneric 1st GC Future,Com
197、modity Exchange,Inc.SilverGeneric 1st SI Future,Commodity Exchange,Inc.PlatinumGeneric 1st PL Future,New York Mercantile ExchangeAluminiumGeneric 1st LA Future,London Metal ExchangeCopperGeneric 1st LP Future,London Metal ExchangeIron oreGeneric 1st SCO Future,Singapore ExchangeScoring our callsTopi
198、cBenchmark index usedMajor players in the next growth areasMSCI ACWI NR USD Investment-grade bonds(EUR)ICE BofA 110Y Euro Corporate Investment-grade bonds(USD)ICE BofA 110Y US Corp TR Emerging markets hard-currency bondsJ.P.Morgan CEMBI Broad CompositeDefensive quality stocksMSCI World Net TR USDEne
199、rgy TransitionMSCI ACWI Net TR USDFuture CitiesS&P Global InfrastructureShifting LifestylesNASDAQ Biotechnology NTRHedge fundsHFRI Fund of Funds Composite Note:1st=front month futures contract,ACWI=All Country World Index,BofA=Bank of America,EM=emerging markets,NR=net return,NTR=net total return,TI
200、PS=Treasury inflation-protected securities,TR=total return.Important legal information49 Important legal informationImprintAuthorsMichael Rist,Head Investment Content&Campaigns,1Roman Canziani,Head Investment Writing,1Bernadette Anderko,Investment Writing,1Lucija Caculovic,Investment Writing,1Helen
201、Freer,Investment Writing,1Jacques Michael Rauber,Investment Writing,1Jonti Warris,Investment Writing,11 This author is employed by Bank Julius Baer&Co.Ltd.,Zurich,which is authorised and regulated by the Swiss Financial Market Supervisory Authority(FINMA).This content constitutes marketing material
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212、JULIUS BAER GROUPHead OfficeBahnhofstrasse 36P.O.Box8010 ZurichSwitzerlandTelephone+41(0)58 888 1111Fax+41(0)58 888 The Julius Baer Group is present in around 60 locations worldwide,including Zurich(Head Office),Dubai,Dublin,Frankfurt,Geneva,Hong Kong,London,Lugano,Luxembourg,Madrid,Mexico City,Monaco,Mumbai,Santiago de Chile,So Paulo,Shanghai,Singapore,and Tel Aviv.06/2023 Publ.No.PU00971EN JULIUS BAER GROUP,2023Founding Signatory of: