MacroResearchBoard

Low Bond Yields Favors Growth Stocks (And The U.S.) – July 2, 2019

Low Bond Yields Favors Growth Stocks (And The U.S.)

We are making some modest adjustments to our regional equity recommended weightings, and note that the macro backdrop was not favorable for taking aggressive deviations from benchmark regional weightings.

The recent decline in bond yields, and likely persistence of low yields for some time, had sector-specific implications and favored longer-duration equity markets. In the current context, this means that investors should favor growth over value stocks, and the U.S. market, which has higher perceived structural earnings growth. The U.S. market, however, has comparatively higher valuations and is over-owned, thus we are only holding a neutral U.S. weighting within a global equity portfolio.