Skip to main content

Choose your location

Current selection

Netherlands
English
Canada
United States
Asia Regional
Australia
New Zealand
Austria
Belgium
Denmark
Estonia
Finland
France
Germany
Iceland
Ireland
Italy
Latvia
Lithuania
Luxembourg
Netherlands
Norway
Portugal
Spain
Sweden
Switzerland
United Kingdom

Download

Audience for the document: Share Class: Language of the document:

Download

Share Class: Language of the document:

Change Details

If you need to change your email address please contact us.
Subscriptions
OK
You are ready to start subscribing.
Get started by going to our products or insights section to follow what you're interested in.

Products Insights

GIPS® Information

T. Rowe Price ("TRP") claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. T. Rowe Price has been independently verified for the twenty four-year period ended June 30, 2020, by KPMG LLP. The verification report is available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm’s policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report.

TRP is a U.S. investment management firm with various investment advisers registered with the U.S. Securities and Exchange Commission, the U.K. Financial Conduct Authority, and other regulatory bodies in various countries and holds itself out as such to potential clients for GIPS purposes. TRP further defines itself under GIPS as a discretionary investment manager providing services primarily to institutional clients with regard to various mandates, which include U.S, international, and global strategies but excluding the services of the Private Asset Management group.

A complete list and description of all of the Firm's composites and/or a presentation that adheres to the GIPS® standards are available upon request. Additional information regarding the firm's policies and procedures for calculating and reporting performance results is available upon request

Other Literature

You have successfully subscribed.

Notify me by email when
regular data and commentary is available
exceptional commentary is available
new articles become available

Thank you for your continued interest

January 2022 / MARKET OUTLOOK

Global Asset Allocation: January Insights

Discover the latest global market themes

1. Market Perspective

  • Despite the coronavirus omicron variant weighing in the near term, growth should remain above potential, with inflation likely to moderate this year amid central banks tightening and improvement in supply chains.
  • Developed market central banks further advance tightening policy, with the Federal Reserve paring back quantitative easing and the Bank of England raising rates. Emerging market central banks may be nearing peak tightening, with China already taking steps towards easier policies.
  • Yield curves likely to flatten as global short-term rates biased higher with central banks tightening, while long-term rates likely capped by easing inflation concerns and moderating liquidity.
  • Key risks to global markets include the omicron variant, persistent inflation, supply chain disruption, central bank missteps, China growth trajectory and increasing geopolitical concerns.

2. Portfolio Positioning

As of 31 December 2021

  • We underweight equities relative to bonds and cash given stocks’ less compelling risk/reward profile, balancing elevated valuations against a backdrop of moderating growth and tightening central bank policies.
  • Within equities, we underweight US growth stocks. We continue to tilt towards cyclicality, maintaining overweights to value-oriented equities globally, US small-caps and emerging market stocks, where valuations are more reasonable and which should benefit from a continued path of recovery.
  • Within fixed income, we overweight inflation-linked securities and underweight government bonds as they provide ballast to the overall portfolio given a more cautious view on equity valuations and more hawkish major central banks that may limit further upside to interest rates.
  • Broadly across our fixed income allocation, we continue to favour shorter-duration and higher-yielding sectors through overweights to emerging market debt and high yield bonds supported by our constructive credit outlook.

3. Market Themes

Holiday Rush

The Federal Reserve turned decisively more hawkish at its December meeting, announcing an acceleration of the pace of tapering, which will now end asset purchases by March, and guided towards a midyear start of rate normalisation. From a timing standpoint, these policies will be taking hold just as growth and inflation are expected to be moderating and amid a spike in the omicron variant across the globe. Given these factors, the market seems to be calling into question how far the Fed can tighten policy before being forced into retreat, looking for the fed funds rate to be 1.6% at the end of 2024, well below the Fed’s target of 2.1%. With other developed market central banks on the move, such as the Bank of England’s recent surprise rate hike, the Fed seems eager to join the holiday rush, perhaps worried that if they don’t move fast enough while they can, they may be vulnerable to respond to the next economic downturn.

A New Year’s Resolution

A confluence of events weighed on Chinese growth last year, including its crackdown on the massive property sector—making up nearly 25% of its economy, increased regulations particularly in the technology and education sectors and market disruption caused by shuttering coal production to meet its clean energy agenda. In response to the weakness, China is acting, having cut its reserve requirement ratio by 50bps, lowering its prime loan rate and accelerating loans for infrastructure projects. As China looks to balance its economy more towards consumption and to be less reliant on the speculative property sector, estimates are suggesting that growth targets for 2022 could be as low as 5.5% to 6%, down from 8% in 2021. Albeit lower, a more stable growth trajectory for China could be beneficial for investors and trading partners, who have had to navigate the recent volatility. But for now, China needs to focus on this year’s resolution to engineer a soft landing in the property market to shore up the economy for years to come.

 

For a region-by-region overview, see the full report (PDF).

 

IMPORTANT INFORMATION

This material is being furnished for general informational and/or marketing purposes only. The material does not constitute or undertake to give advice of any nature, including fiduciary investment advice, nor is it intended to serve as the primary basis for an investment decision. Prospective investors are recommended to seek independent legal, financial and tax advice before making any investment decision. T. Rowe Price group of companies including T. Rowe Price Associates, Inc. and/or its affiliates receive revenue from T. Rowe Price investment products and services. Past performance is not a reliable indicator of future performance. The value of an investment and any income from it can go down as well as up. Investors may get back less than the amount invested.

The material does not constitute a distribution, an offer, an invitation, a personal or general recommendation or solicitation to sell or buy any securities in any jurisdiction or to conduct any particular investment activity. The material has not been reviewed by any regulatory authority in any jurisdiction.

Information and opinions presented have been obtained or derived from sources believed to be reliable and current; however, we cannot guarantee the sources’ accuracy or completeness. There is no guarantee that any forecasts made will come to pass. The views contained herein are as of the date written and are subject to change without notice; these views may differ from those of other T. Rowe Price group companies and/or associates. Under no circumstances should the material, in whole or in part, be copied or redistributed without consent from T. Rowe Price.

The material is not intended for use by persons in jurisdictions which prohibit or restrict the distribution of the material and in certain countries the material is provided upon specific request. It is not intended for distribution to retail investors in any jurisdiction.

Previous Article

January 2022 / WEBINAR

Innovation and Capital Markets Considerations
Next Article

January 2022 / EMERGING MARKETS EQUITY

China Deleveraging: Domestic and Global Impacts
202201‑1983954

December 2021 / INVESTMENT INSIGHTS

Investment ideas for European investors for the year ahead

Investment ideas for European investors for the year ahead

Investment ideas for European investors for...

Our Multi-Asset Solutions Team share a range of investment ideas to position portfolios...

By Yoram Lustig & Michael Walsh

By Yoram Lustig & Michael Walsh

You are now leaving the T. Rowe Price website

T. Rowe Price is not responsible for the content of third party websites, including any performance data contained within them. Past performance is not a reliable indicator of future performance.