An update to the Investment Outlook 2016

Equity markets have been subjected to increased volatility in 2016 due to a confluence of events. These include economic growth concerns in China, severe oscillation in the price of oil, negative interest rates in some regions and, more latterly, Brexit. Investors are also focussed on the US interest rate cycle and the likely timing of the next rate rise. Economic uncertainty has resulted in many equity markets struggling in the first half of the year; although the US and UK markets have been notably resilient in local currency terms. Despite the uncertainty, equities remain attractively valued compared to bonds and cash. However, further upside is likely to require some good news on the economic or earnings front. Long-term eurozone bond yields reached fresh all-time lows towards the end of June. Despite the lack of value, bonds have been supported by the tailwind of aggressive ECB monetary policy action.

 

For a more in depth outlook for 2016 provided by Zurich Life please click here.

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