Looking through the inflation and rates peak

In anticipation of lower inflation and long-term rates in 2023.

Investment themes 2023

THEME 1

2022 has been a year of surprises for investors, ranging from the aftermath of COVID-related disruptions in global supply chains to conflict in Ukraine and an associated European energy crisis. In addition, the global economy has seen an unprecedented swing from massive government and central bank boosts to the global economy in 2021, to a sharp reversal towards higher policy interest rates from global central banks in 2022 as inflation rates has spiked to decade highs.

The resulting slowdown in economic demand, easing of supply chain pressures and cooling of commodity prices should calm inflation pressures. This in turn should lead to lower long-term bond yields. We believe that long-term investors should look beyond the peak in inflation and policy rates to the investment opportunities that lower inflation and long-term rates can offer.