Sarasin & Partners: Through a glass, darkly

Opaque outlook

The financial outlook is particularly opaque – yes, some real value is starting to appear as markets fall, but while central banks continue to throttle demand, caution is needed for a while longer.

The first half of 2022 saw the worst start for US equities since 1970, with no single sector in positive territory except energy. The sell-off has been extraordinarily widespread, with government, corporate and junk bonds all showing negative returns, alongside bear markets in most equity markets. Two unlisted asset classes showed surprisingly strong positive returns - private equity and global real estate. US residential house prices rose by an extraordinary 20.4% in the year to May, while prime London rents climbed by the greatest extent in two decades. This was of little help to inves...