Foresight: key macro themes and market outlook

October 31, 2019

Nathan Thooft, Senior Managing Director, Asset Allocation, Portfolio Solutions Group
Jamie Robertson, Senior Managing Director, Senior Portfolio Manager and Head of Asset Allocation
Frances Donald, Chief Economist & Head of Macro Strategy
Benjamin W. Forssell, CFA, Global Multi-Asset Client Portfolio Manager
Luke Browne, Senior Managing Director, Head of Asset Allocation

The asset allocation team’s short-term and structural views


In the last six months, financial markets have had to counterbalance two opposing market forces. On the one hand, investors had to parse through the impact of geopolitical trade tensions; on the other, they had to navigate a seemingly coordinated shift toward an easier monetary policy by global central banks. As we move closer to 2020, it appears the headwinds created by trade-related uncertainty are beginning to outweigh the benefits of lower rates. The global economy is in a manufacturing recession; U.S. growth is slowing materially, China’s economy remains, at best, a neutral global influence and, at worst, a structural drag on global trade. However, against this backdrop of muted growth and elevated uncertainty, there remain upside risks that we believe are worth considering, such as the possibility of a de-escalation in trade tensions, a structurally strong U.S. consumer that exceeds expectations, and the beneficial effects of looser financial conditions globally, thanks to monetary easing.

It’s through this lens that we formulate our return forecasts for the various asset classes over the next five years. Our forecasts are derived from a wide number of sources, including input from the team of macroeconomic strategists who are embedded within the asset allocation team. While our long-term forecasts lean heavily on model-based valuation estimates, we firmly believe that macroeconomic views play an important role in identifying short-term investment opportunities in actively managed portfolios.

Key macro views

Short-term macroeconomic themes

  • Uncertainty caused by trade tensions is weighing on global trade volumes, manufacturing activity, and business confidence. While the unpredictable nature of geopolitical developments means that uncertainty could rise as well as fall in a short span of time, we don’t expect these tensions to disappear over the next year. This continued uncertainty around the outcome implies that investors will seek safe assets, which would in turn provide sustained support for the U.S. dollar (USD).

  • Globally, central banks in both developed and emerging markets are engaged in a monetary policy easing cycle which we expect to continue in the coming six months. Lower rates should ease financial conditions and support rate-sensitive sectors.

  • An interesting divergence is unfolding in the U.S. economy: When combined, these two factors imply that the United States might experience a few quarters of more modest growth and negative sentiment attached to it. However, given the important support provided to the consumer and residential real estate markets in the form of lower interest rates, we don't expect a recession in the near term and would view overly negative sentiment as an intriguing entry point.

  • Asia remains caught in the crosscurrents of trade tensions and China’s increasingly active stimulus program. Unfortunately, we expect that Chinese growth will, at best, stabilize; the “positive feedthrough” on the region and global trade will be much more muted than before.

  • With key economies in the region flirting with a manufacturing recession and prolonged geopolitical uncertainty weighing on the outlook—a lot of which has already been priced into European assets. On a longer term basis, continued easy monetary policy and any removal of the above factors could lead to a re-rating, sending prices higher, which would make European equities an attractive asset class from a valuation perspective over the medium term.

Longer-term strategic views

  • We expect global interest rates to remain at current or lower levels for several years as global growth struggles to hit “escape velocity” to above potential. This low growth environment in turn implies a prolonged period of easy monetary policy, because key central banks would lack the conditions required to allow them to embark on a path toward normalization.

  • With a global trend toward structurally low interest rates, “search for yield” will continue to be an important investment theme that will favor asset classes that can provide investors with positive carry; emerging-market debt would be one such example.

  • We continue to see limited inflationary pressures over our five-year forecast horizon. The combination of low growth and low inflation suggests a flatter yield curve over the multi-year period than we have seen in prior economic cycles.

  • China, the world’s second-largest economy, is likely to continue to structurally decelerate, creating downside pressure on global trade activity on a long-term basis. While the country’s economic growth previously translated into a tide that lifted all boats, its transition to a developed market and consumer-based economy has global market implications. That said, for both valuation and carry reasons, emerging markets (EM) remain an attractive asset class over our forecast horizon.

Five-year asset class forecasts—expected return components (%)

Five-year asset class forecasts—expected return components (%) Graph
Source: Manulife Investment Management’s asset allocation team, September 30, 2019. Projections or other forward-looking statements regarding future events, targets, management discipline, or other expectations are only current as of the date indicated. There is no assurance that such events will occur, and if they were to occur, the result may be significantly different than that shown here.
Note: Model inputs are factors in Manulife Investment Management research and are not meant as predictions for any particular asset class, mutual fund, or investment vehicle. Components not represented in the chart of zero or negligible values.

Short-term (6–12 months) asset allocation view

Short-term (6–12 months) asset allocation view Graph
Source: Asset allocation macro strategy team, Manulife Investment Management, September 30, 2019. Projections or other forward-looking statements regarding future events, targets, management discipline, or other expectations are only current as of the date indicated. There is no assurance that such events will occur, and if they were to occur, the result may be significantly different than that shown here.

Long-term (3–5 years) asset allocation view

Long-term (3–5 years) asset allocation view Graph
Source: Asset allocation macro strategy team, Manulife Investment Management, September 30, 2019. Projections or other forward-looking statements regarding future events, targets, management discipline, or other expectations are only current as of the date indicated. There is no assurance that such events will occur, and if they were to occur, the result may be significantly different than that shown here.

Fixed income

United States

Short-term views

United States Fixed income Short-term Views Meter

Over the last 12 months, the key question relating to monetary policy has morphed from “how many more hikes?” to “are recent Fed cuts a simple policy adjustment or something more akin to a conventional easing cycle?” We currently anticipate two more interest-rate cuts by the end of the first half of 2020, but acknowledge that there is a distinct possibility of more aggressive easing should the macroeconomic backdrop deteriorate further.

 

Strategic views

United States Fixed income Strategic Views Meter

At this stage, we believe the U.S. Federal Reserve (Fed) will opt for a prolonged pause once the current easing cycle has ended. This is why we expect longer-duration U.S. Treasuries to come under some pressure, but corporate returns are likely to remain favorable. We view high-yield bonds (HY) and leveraged loans more favorably than U.S. investment-grade (IG) debt. In our view, HY should benefit from the relatively benign interest-rate and credit environment.


Emerging markets

Short-term views

Emerging markets Fixed income Short-term Views Meter

We expect EM central banks, particularly those in Asia, to embark on a sizable monetary easing exercise. This is particularly true in China, where monetary and fiscal policy is supportive of the asset class.

 

Strategic views

Emerging markets Fixed income Strategic Views Meter

The quality of EM debt has been improving on a structural basis, and we view the asset class as a higher quality credit relative to U.S. HY and loans. We also favor the “carry” that the asset class offers. Within the group, we expect local currency sovereign debt to provide the most returns. Broadly speaking, we believe EM debt stands out from a total return perspective.


Europe

Short-term views

Europe Fixed income Short-term Views Meter

As with the United States, the current picture in Europe is completely different from what it was earlier in the year. With the European Central Bank (ECB) having cut rates and engaged in another round of quantitative easing (QE), we expect European sovereign yields to remain anchored at current levels.

 

Strategic views

Europe Fixed income Strategic Views Meter

The “Japanification” of Europe (i.e., sustained deflationary pressure and weak demographics) could be problematic and keep a lid on rates and hamper growth. With the ECB having explicitly linked QE to inflation, we believe the central bank will either maintain its current level of policy accommodation or ease further over the next few years.


Canada

Short-term views

Canada Fixed income Short-term Views Meter

While Canadian fixed income has benefited from lower global yields, we expect the Bank of Canada to follow other global central banks’ lead and eventually ease monetary policy.

 

Strategic views

Canada Fixed income Strategic Views Meter

In our view, Canadian rates should benefit from a stronger Canadian dollar (currency return), marginally higher rates (matching U.S. rates) over the medium term, and positive price returns. Returns for Canadian investment-grade (IG) bonds should match their U.S. counterparts, with mild currency appreciation potentially providing a modest benefit to Canadian IG issues.


Japan

Short-term views

Japan Fixed income Short-term Views Meter

In the short term, we expect minimal movement in the country’s interest rates, barring any material appreciation in the Japanese yen.

 

Strategic views

Japan Fixed income Strategic Views Meter

We expect interest rates in Japan to remain at, or near, 0%, subject to some volatility. Inflationary pressure in the country is likely to remain negligible throughout our five-year forecast period, and we expect muted total returns in this asset class.

Fixed income: five-year forecast (%)

 

U.S. investment grade

Canadian investment grade

U.S. high yield

U.S. bank loans

U.S. TIPS

Emerging market debt

Multiverse

Income return

2.3

2.1

6.2

5.6

0.4

5.3

1.7

Price return

-0.4

-0.3

-1.7

-0.6

1.2

-0.4

-0.8

Currency return (vs. USD)

0.0

0.9

0.0

0.0

0.0

0.1

0.4

Total return (USD)

1.9

2.6

4.5

5.1

1.6

5.1

1.4

 

Currency return (vs. CAD)

-0.9

0.0

-0.9

-0.9

-0.9

-0.7

-0.4

Total return (CAD)

1.0

1.8

3.6

4.2

0.8

4.2

0.5

 

Currency return (vs. EUR)

-1.1

-0.2

-1.1

-1.1

-1.1

-0.9

-0.6

Total return (EUR)

0.8

1.6

3.4

4.0

0.6

4.0

0.3

 

Currency return (vs. GBP)

-1.7

-0.9

-1.7

-1.7

-1.7

-1.6

-1.3

Total return (GBP)

0.1

0.9

2.7

3.2

-0.1

3.3

-0.4

Source: Manulife Investment Management’s asset allocation team, September 30, 2019. Projections or other forward-looking statements regarding future events, targets, management discipline, or other expectations are only current as of the date indicated. There is no assurance that such events will occur, and if they were to occur, the result may be significantly different than that shown here.
Note: Model inputs are factors in Manulife Investment Management research and are not meant as predictions for any particular asset class, mutual fund, or investment vehicle.

Equities


United States

Short-term views

United States Equity Short-term Views Meter

Trade policy uncertainty is weighing on consumer and business sentiment, which is beginning to filter through to hard economic data. While this softening at the margin is something that needs to be closely monitored, we maintain that the United States still has the best overall growth profile among developed economies. The

 

Strategic views

United States Equity Strategic Views Meter

The United States has the healthiest macro profile in the developed world. Unfortunately, unsustainable valuation, profit margins, and sales growth point to possible relative downside risk that could hamper returns. Over the medium term, the USD could also hurt the asset class’s returns as other economies’ currencies appreciate relative to the greenback during a cyclical upswing.


Emerging markets

Short-term views

Emerging markets Equity Short-term Views Meter

We remain cautious about this asset class during the next few months due to uncertain global trade conditions, which are closely linked to EM earnings growth and market returns.

 

Strategic views

Emerging markets Equity Strategic Views Meter

In our view, valuation remains attractive in the EM equities space with potential for further upside, driven by expectations for a structurally weaker USD in the long run.

We believe this asset class retains the most attractive growth profile, which should provide attractive returns in the event of a global cyclical upswing.


Europe

Short-term views

Europe Equity Short-term Views Meter

Despite the likelihood of short-term volatility due to geopolitical events (Brexit and potential trade tensions are top of mind) we believe that depressed valuations will revert back to higher levels as global manufacturing/trade impulse stabilizes.

 

Strategic views

Europe Equity Strategic Views Meter

Our analysis suggests that valuation and dividend profiles for this asset class remain attractive; however, the investment case for European equities is partly counterbalanced by their weak growth profile. While an expected appreciation in the euro could translate into a tailwind, the ECB’s recent dovish turn is likely to cancel out any benefits from exchange rates in the medium term. On balance, we continue to view the asset class as being modestly attractive.


Canada

Short-term views

Canada Equity Short-term Views Meter

Valuation for Canadian equities remains bifurcated, with financials and energy trading at a discount while the other major industry groups are richly valued. Slowing global fundamentals also warrant caution.

 

Strategic views

Canada Equity Strategic Views Meter

An analysis of the dividend profile for Canadian equities suggests the asset class remains attractive over the longer term. The same can be said from a valuation perspective (particularly with reference to the energy and financials sectors, which make up about half of the index).


Japan

Short-term views

Japan Equity Short-term Views Meter

There are reasons to be incrementally more optimistic about Japan: Earnings momentum has improved relative to other developed markets and, while not positive, some higher frequency data points suggest they’re stabilizing. While the consumption tax increase could be disruptive in the short term, we expect the government to be better equipped to insulate the effects of the hike than in previous instances.

 

Strategic views

Japan Equity Strategic Views Meter

In our view, structural factors in favor of Japanese equities include inexpensive valuation, continued improvement in corporate governance, and buybacks, which should provide a good counterbalance to the market’s modest growth profile. We remain mildly positive on the asset class.

Developed-market equities: five-year forecast (%)

 

U.S. large cap

U.S. mid cap

U.S. small cap

Canadian large cap

Canadian small cap

EAFE large cap

EAFE small cap

World

Europe

Japan

Income return

1.9

1.8

1.7

3.1

2.7

3.5

2.7

2.5

3.7

2.6

Nominal GDP/growth

5.2

5.5

5.1

4.1

5.0

3.1

3.7

4.4

3.4

1.6

Valuation

-3.3

-0.5

-0.5

0.0

0.6

-0.5

0.3

-2.2

-1.5

1.9

Currency return (vs. USD)

0.0

0.0

0.0

0.9

0.9

0.8

0.8

0.3

1.3

-0.3

Total return (USD)

3.7

6.8

6.3

8.1

9.3

6.8

7.4

5.0

6.9

5.8

 

Currency return (vs. CAD)

-0.9

-0.9

-0.9

0.0

0.0

-0.1

0.0

-0.6

0.4

-1.1

Total return (CAD)

2.8

5.9

5.4

7.2

8.3

5.9

6.6

4.1

6.0

4.9

 

Currency return (vs. EUR)

-1.1

-1.1

-1.1

-0.2

-0.2

-0.3

-0.3

-0.8

0.2

-1.3

Total return (EUR)

2.6

5.7

5.2

7.0

8.1

5.7

6.3

3.9

5.8

4.7

 

Currency return (vs. GBP)

-1.7

-1.7

-1.7

-0.9

-0.9

-1.0

-1.0

-1.4

-0.5

-2.0

Total return (GBP)

1.9

4.9

4.5

6.2

7.4

5.0

5.6

3.2

5.1

4.0

Source: Manulife Investment Management’s asset allocation team, September 30, 2019. Projections or other forward-looking statements regarding future events, targets, management discipline, or other expectations are only current as of the date indicated. There is no assurance that such events will occur, and if they were to occur, the result may be significantly different than that shown here.
Note: Model inputs are factors in Manulife Investment Management research and are not meant as predictions for any particular asset class, mutual fund, or investment vehicle.

Emerging-market equities: five-year forecast (%)

 

Emerging markets

China

India

Latin America

Brazil

All countries Asia (ex-Japan)

Income return

2.7

2.4

1.5

3.2

3.4

2.8

Nominal GDP/growth

5.8

5.8

8.5

6.9

8.0

5.3

Valuation

0.6

0.4

-0.1

0.4

-0.8

0.5

Currency return (vs. USD)

0.3

-0.6

-0.5

1.1

1.0

0.2

Total return (USD)

9.4

7.9

9.3

11.9

11.7

8.9

 

Currency return (vs. CAD)

-0.6

-1.5

-1.3

0.3

0.1

-0.6

Total return (CAD)

8.5

7.0

8.4

10.9

10.8

7.9

 

Currency return (vs. EUR)

-0.8

-1.7

-1.5

-0.1

-0.1

-0.8

Total return (EUR)

8.3

6.8

8.2

10.7

10.5

7.7

 

Currency return (vs. GBP)

-1.5

-2.3

-2.2

-0.6

-0.7

-1.5

Total return (GBP)

7.5

6.1

7.5

9.9

9.8

7.0

Source: Manulife Investment Management’s asset allocation team, September 30, 2019. Projections or other forward-looking statements regarding future events, targets, management discipline, or other expectations are only current as of the date indicated. There is no assurance that such events will occur, and if they were to occur, the result may be significantly different than that shown here.
Note: Model inputs are factors in Manulife Investment Management research and are not meant as predictions for any particular asset class, mutual fund, or investment vehicle.

Alternatives/real assets


U.S. real estate investment trusts (REITs)

Short-term views

U.S. real estate investment trusts (REITs) Short-term Views Meter

Sentiment toward the asset class continues to be positive on the back of the Fed’s dovish stance and the potential returns on offer relative to investment-grade fixed-income securities—a not insignificant factor within the current “search for yield” environment. The promise of consistent cash flows against a backdrop framed by stable interest rates and declining equity growth forecasts can be very appealing. However, rising longterm interest rates remain the biggest relative risk for this asset class.

 

Strategic views

U.S. real estate investment trusts (REITs) Strategic Views Meter

We expect U.S. REITs to outperform modestly over a longer timeframe. From a yield perspective, we favor the asset class over many IG bonds. Fundamentals supporting the asset class are likely to stay solid, but latecycle concerns could continue to limit its appeal. Additionally, valuation for the asset class looks set to remain rich, even as growth slows.


Global natural resources

Short-term views

Global natural resources Short-term Views Meter

Oil is at the lower end of our rangebound outlook. Valuations for energy equities are attractive but more catalysts needed for investors to return to this unloved asset.

 

Strategic views

Global natural resources Strategic Views Meter

We expect the asset class to outperform global markets (including EM) based on the potential for valuation expansion and high dividend yield. Expectations for higher oil prices, along with positive dynamics in gold and copper markets, should provide additional support for natural resource equities.


Hard assets: real estate (U.S. and Canada)

Short-term views

Hard assets: real estate (U.S. and Canada) Short-term Views Meter

We expect income growth to remain above average, driven by generally strong demand fundamentals and a restrained supply pipeline. Although valuation gains have moderated from their peak earlier in the cycle, we expect these gains to remain near current levels given the strength of capital market activities and stable interest-rate outlook.

 

Strategic views

Hard assets: real estate (U.S. and Canada) Strategic Views Meter

We have a favorable view of the asset class. In our opinion, its characteristics— income generation, stability of returns, low correlation with other assets and inflation protection—will continue to appeal. Specifically, we think the overall strength in underlying fundamentals and an environment that emphasizes “search for yield” will support continued gains in the North American real estate markets.

Alternatives/real assets: five-year forecast (%)

 

U.S. REITs

Global natural resources

Global listed infrastructure

 

Commodities

Income return

4.0

4.6

4.5

Collateral

1.8

Nominal GDP/growth

1.8

3.8

3.4

Nominal GDP/ growth

1.3

Valuation

-0.7

0.0

-0.7

Inflation

1.9

Currency return (vs. USD)

0.0

0.3

0.3

Roll yield

0.3

Diversification

1.0

Total return (USD)

5.1

8.6

6.6

 

6.3

 

Currency return (vs. CAD)

-0.9

-0.6

-0.6

  

Total return (CAD)

4.2

7.7

5.7

  
 

Currency return (vs. EUR)

-1.1

-0.8

-0.8

  

Total return (EUR)

4.0

7.5

5.5

  
 

Currency return (vs. GBP)

-1.7

-1.5

-1.4

  

Total return (GBP)

3.3

6.8

4.8

  
Source: Manulife Investment Management’s asset allocation team, September 30, 2019. Projections or other forward-looking statements regarding future events, targets, management discipline, or other expectations are only current as of the date indicated. There is no assurance that such events will occur, and if they were to occur, the result may be significantly different than that shown here.
Note: Model inputs are factors in Manulife Investment Management research and are not meant as predictions for any particular asset class, mutual fund, or investment vehicle.

Hard assets

Please note: The following forecasts and commentary are provided by investment teams managing strategies that correspond to each asset class. Expected returns are related to the specific index of the underlying strategy, and as a result may differ from the broader asset class.

Hard assets: five-year forecast (%)

 

Expected return

Historical standard deviation

Global farmland

9–11

4.5

Global timberland

9–11

6.6

U.S. commercial real estate

6–8

7.6

Canadian commercial real estate

6–8

3.5

U.S. infrastructure

9–14

Source: Forecasts are from investment teams managing the respective asset classes within Manulife Investment Management’s private markets, as of September 30, 2019. Projections or other forward-looking statements regarding future events, targets, management discipline, or other expectations are only current as of the date indicated. There is no assurance that such events will occur, and if they were to occur, the result may be significantly different than that shown here.
Expected returns are produced by the teams at Manulife Investment Management’s private markets that specialize in each of the asset classes referenced in the above table. These are not meant as predictions for any particular asset class, mutual fund, or investment vehicle. Historical standard deviation is calculated using the following indexes: global farmland, the NCREIF U.S. Farmland Index; global timberland, the NCREIF U.S. Timberland Index; U.S. commercial real estate, the NCREIF Open End Diversified Core Equity (ODCE) Index (2005 to 2018); Canadian commercial real estate, the MSCI/REALPAC Canada Quarterly Property Fund Index (Unfrozen, 2005 to 2018); and U.S. infrastructure, the Cambridge Associates LLC Infrastructure Index. Please note that the NCREIF Open End Diversified Core Equity (ODCE), and the MSCI/REALPAC Canada Quarterly Property Fund Index have leverage of 21.5% and 21.0% respectively, as of Q4 2018.

Index definitions

NCREIF Farmland Index
The NCREIF Farmland Index is a quarterly index that measures the performance of a large pool of individual U.S. farmland properties acquired in the private market for investment purposes only. The composition of the index can change over time—for example, when assets are sold, and when new Data Contributing members are added. As such, the Farmland Index may not be representative of the agricultural investment market as a whole.
NCREIF Timberland Index
The NCREIF Timberland Index is a composite return measure of investment performance of a large pool of individual U.S. timber properties acquired in the private market for investment purposes only. It is updated quarterly and is reported on a national level. The index is subdivided into three regions: the Pacific Northwest, South, and Northeast. The composition of the index can change over time, and as such, may not be representative of the Timberland investment market as a whole.
NCREIF Open End Diversified Core Equity ODCE Index
This is a capitalization weighted, gross of fee, time-weighted return index with an inception date of December 31, 1977. Open-end funds are generally defined as infinite-life vehicles consisting of multiple investors who have the ability to enter or exit the fund on a periodic basis, subject to contribution and/or redemption requests.
MSCI/REALPAC Canada Quarterly Property Fund Index
The MSCI/REALPAC Canada Quarterly Property Fund Index covers unlisted open-end real estate funds operating in Canada. The index measures the investment performance at the property and fund level. The index is based on funds with a total net asset value of CAD$32.1 billion, as at December 2018.
Cambridge Associates LLC Infrastructure Index
The Cambridge Associates LLC Infrastructure Index is a horizon calculation based on data compiled from 93 infrastructure funds, including fully liquidated partnerships, formed between 1993 and 2015. Private indexes are pooled horizon internal rate of return (IRR) calculations, net of fees, expenses, and carried interest.
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Australia: Hancock Natural Resource Group Australasia Pty Limited, Manulife Investment Management (Hong Kong) Limited. Brazil: Hancock Asset Management Brasil Ltda. Canada: Manulife Investment Management Limited, Manulife Investment Management Distributors Inc., Manulife Investment Management (North America) Limited, Manulife Investment Management Private Markets (Canada) Corp. China: Manulife Overseas Investment Fund Management (Shanghai) Limited Company. European Economic Area and United Kingdom: Manulife Investment Management (Europe) Ltd. which is authorized and regulated by the Financial Conduct Authority, Manulife Investment Management (Ireland) Ltd. which is authorized and regulated by the Central Bank of Ireland Hong Kong: Manulife Investment Management (Hong Kong) Limited. Indonesia: PT Manulife Aset Manajmen Indonesia. Japan: Manulife Asset Management (Japan) Limited. Malaysia: Manulife Asset Management Services Berhad. Philippines: Manulife Asset Management and Trust Corporation. Singapore: Manulife Investment Management (Singapore) Pte. Ltd. (Company Registration No. 200709952G) Switzerland: Manulife IM (Switzerland) LLC. Taiwan: Manulife Investment Management (Taiwan) Co. Ltd. Thailand: Manulife Asset Management (Thailand) Company Limited. United States: John Hancock Investment Management LLC, Manulife Investment Management (US) LLC, Hancock Capital Investment Management, LLC and Hancock Natural Resource Group, Inc. Vietnam: Manulife Investment Fund Management (Vietnam) Company Limited.
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About the Author

2017 May Thooft Nathan Author V1 D1 Nathan Thooft

Senior Managing Director, Asset Allocation, Portfolio Solutions Group

2019 03 Author Robertson James Jamie Robertson

Senior Managing Director, Senior Portfolio Manager and Head of Asset Allocation

2018 10 Author Donald Frances 2 Frances Donald

Chief Economist & Head of Macro Strategy

The opinions expressed are those of Manulife Asset Management™ at the time of publication, and are subject to change based on market and other conditions. The information in this article including statements concerning financial market trends, are based on current market conditions, which will fluctuate and may be superseded by subsequent market events or for other reasons. Manulife Asset Management disclaims any responsibility to update such information. All overviews and commentary are intended to be general in nature and for current interest. While helpful, these overviews are no substitute for professional tax, investment or legal advice. Clients should seek professional advice for their particular situation. Neither Manulife Financial, Manulife Asset Management, nor any of their affiliates or representatives is providing tax, investment or legal advice. Past performance does not guarantee future results. This material was prepared solely for informational purposes, does not constitute an offer or an invitation by or on behalf of Manulife Asset Management to any person to buy or sell any security and is no indication of trading intent in any fund or account managed by Manulife Asset Management.

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