Why we favour equities over bonds

ON ASSET ALLOCATION

Russell Investments' John Velis explains his moderately positive view on equities relative to fixed income.

We favour equities over bonds. The scenario is for moderate expansion in the developed world, with transitory inflation and slowly rising interest rates. Corporate profits and margins in most markets will continue to expand, and with valuations at moderate levels, equities are poised to have a good run into the summer. We are short duration, with no regional biases of note. Real assets continue to see us at a neutral weighting in commodities and infrastructure and slightly underweight listed real estate, while we wait for signs the US property market has bottomed. Inherent risks will ...