Our forecasts continue to favor emerging markets in both the equity and credit markets, says GMO Asset Allocation team member John Thorndike. As of the end of September, the spread between our forecasts for emerging markets equities and large cap U.S. stocks was nearly 8.5%. You have to go back to 2003 to find a wider spread in favor of EM.
At the other end of the investment spectrum, the continued rise in short-term interest rates has pushed our forecast for U.S. cash to 1% real, which provides a tailwind for investors who hold short-term investments in their portfolios.
The most recent forecast is available in the chart below.
© GMO LLC
© GMO
