Strategic Asset Allocation (SAA) plays a crucial role in an investors’ decision-making process. This report features the quarterly update of three SAA models, their portfolio characteristics and the (proprietary) data we have used to construct the SAA models. In addition, we update the Expected Returns based on the return assumptions of approx. 70 asset managers and present tables with volatility and correlation data for every asset class.

Trump’s popularity has fallen sharply and he will have to pull out all the stops if the Republicans are to retain control of Congress in the mid-term elections in November. This means he does not want a war with Iran and wants to keep oil prices low. Iran is exploiting this by keeping up the pressure to force concessions from the US. This, in turn, makes Trump more unpredictable, and this is likely to continue to influence the currency markets for some time.

There is a lot going on on the global stage, while inflation is above target and the economy continues to perform surprisingly well. Although interest rates are reacting to these developments, on balance they remain stable. However, there are a number of factors that could also lead to greater volatility in the interest rate markets in the coming months.