Thorough research, robust frameworks and extensive experience are critical to inform long-term investment decisions. This is what Horizon is truly about.
Editorial by Christophe Donay and César Pérez Ruiz
Head of Asset Allocation & Macro Research
César Pérez Ruiz
Head of Investment Platform
Chief Investment Officer
This year marks the 10th annual edition of Horizon, our top-down analysis of the structural dynamics at work in the global economy and financial markets. And, of course, the centrepiece of Horizon is our 10-year return expectations for a wide range of assets based on these dynamics.
We see several important factors as having an increasing impact on economies and markets over the next 10 years. Among them is ‘The Return of Big Government’. The possibility that governments continue to intervene is a major factor we consider in our long-range forecasts. It also serves as a basis for another factor, the negative externalities (and how to deal with them) generated by economic systems—and most particularly climate change.
We believe there is a growing risk of a change in the inflation regime: our central scenario is that we will see a shift towards higher structural inflation in most developed and emerging markets alike.
We also look at what we call the ‘Great Divergence’. As our analysis shows, it is taking ever more debt issuance to boost growth even minimally. This divergence between rising debt and sluggish GDP growth is an important source of both financial market and economic instability.
As the current innovation wave has matured, we believe that lower gains from technological innovation point to higher inflationary pressures ahead. The maturing of innovation could also fuel the downward slide in long-term returns across public listed assets over the next 10 years.
If, as seems possible to us, higher structural inflation returns, investors will have to reassess the profitability of assets in which they are invested. For many years, the virtual disappearance of inflation meant there was hardly any need to make a distinction between nominal and real returns. But this is changing, explaining why we are publishing both.
Explore our secular themes
The return of big government
A new era for inflation
Waiting for a new innovation wave
Tackling traditional assets’ low future returns
An alternative solution to shallow returns
The future of fiat currencies
ESG investing goes mainstream
Looking beyond the 60/40 portfolio
Full list of articles
Private investing set to maintain investor interest
An alternative solution to shallow retuns
China’s ‘Big Government’ tradition and its future
The return of big government
Is a return to 1970s-style inflation on the cards?
A new era for inflation
Investors need to face the consequences of disruptive innovation
Waiting for a new innovation wave
Convertible bonds: a brief introduction
Towards climate-aware asset allocations
ESG investing goes mainstream
Chinese equities: a leap of faith
The uncertain promise of cryptocurrencies
The future of fiat currencies
Endowment-style investing explained
The stock-Bond correlation
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