--> Key Results * Emerging markets are more subject to macro influence and show positive ‘macro style’; ie, they benefit more from expanding and rising of risk appetite, while developed markets exhibit the opposite * By country, Germany and France have a positive bias in Europe, deviating from the UK and Switzerland on the negative end. Much less deviation is seen in GEM and Asia Pacific ex-Japan (all in positive) and in North America, the US dominates * Sector wise, Materials, Industrials, IT and Consumer Discretionary favoured on rising yields, inflation, leading indicators and risk appetite. Consumer Staples, Health Care, Telecom and Utilities avoided * From a style perspective, value investors assume highest macro risk while Growth maintains positive macro exposure in AxJP and Emerging Markets. Quality and Momentum show some countercyclicality and outperform as the economy deteriorates
Report Attached * This report is an extensive guide to macro sensitivities/strategies for 8 regions, 20 countries, GICS L1/L3 sectors and 23 investment styles
* Our analysis contains 40 macro factors incl. FX, interest rates, implied inflation, commodities, leading indicators, economic surprises and risk measures
* We summarise key investment ideas for 24 important macro scenarios (12 factors) on a regional, country, sector as well as a single-stock basis
- Region, country, sector and style sensitivity Our analysis demonstrates that sensitivities to different macro factors differ significantly across regions, countries, sectors and investment styles. Europe and Japan profit from rising interest rates while emerging markets gain from rising commodity prices, implied inflation and economic leading indicators. North America is less dependent on the macro environment than other markets. In terms of sectors, Materials, Industries, IT and Consumer Discretionary exhibit the highest cyclicality; Consumer Staples, Health Care, Telecom and Utilities the lowest. From a style perspective, Value benefits most from a positive macro scenario followed by Growth while Quality and Momentum are less sensitive to macro factors.
- GICS L3 sector sensitivities We look at the top L3 sector ideas under specific macro scenarios (10 included) and highlight the top 5 sectors to profit from a macro trend. Conversely, for a given L3 sector, we identify the most influential macro factors that might impact the relative sector return. Additionally, an overview of all sector-macro factor sensitivity is provided in the sector scorecards. How to play 24 macro scenarios Separately, we offer comprehensive investment advice on
- how to play 24 standard macro scenarios (12 factors) on a regional, country, sector and even a single-stock basis.