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* Unhedged Value
The Forecaster tool allows investors to select a combination of assets, currencies and time horizons of interest for comparison on a risk-return chart. These forecasts are produced by the Multi-Asset Solutions’ Research team at abrdn. We aim to update the forecasts on a semi-annual basis, with the current numbers correct as of March 2021.
Return projections are estimates and provide no guarantee of future results.
For institutional, professional, qualified/wholesale investors only. Not for retail clients.
Regional equities have followed different paths in recent years. US equities, powered by strong technology growth stocks, have outperformed other regions by a large margin. Though there has been a little bit of catch up in recent months as cyclical value stocks have outperformed.
Our current view is that the US will continue to offer a strong growth advantage over other regions, now supported by a very strong post-Covid stimulus. Together with our central expectation that interest rates will remain very low, this growth will continue to justify the US’s richer valuation and relatively attractive returns. Japan and Europe are both held back by their relative sluggish structural growth expectations. The UK remains interesting from a valuation point of view, and its high exposure to cyclical sectors means that, after many years of underperformance, it may finally outperform as the recovery gains momentum. EM may also be attractive as Covid vaccination levels start to rise and the recovery accelerates.
* Unhedged Value
The cash-equity line serves to illustrate risk-adjusted relative performance. Assets above the line are expected to outperform a portfolio of equivalent risk containing only cash and equities; assets below are expected to underperform.