Global Outlook and Strategy June 2016: Distortion in Asset Prices

Key Points

• We expect modest global economic growth for the remainder of 2016
• Global central bank policy remains the focus
• Economic growth in Australia is expected to fade
• Bond yields are depressed driving investors into higher risk assets
• Boutique property sectors with demographic support look attractive
• Valuations in risk assets are extended on an absolute basis but remain cheap relative to bonds
• We maintain an overweight to cash
• Long term asset class returns are expected to trend lower

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