GLOBAL INVESTMENT OUTLOOK Q4 2019

Raising resilience

Portfolio resilience is crucial at a time of elevated macro uncertainty.

Raising resilience
Stock-bond correlations in the U.S., 2000-2019

Stock-bond correlations in the U.S. and Europe, 2000-2019

Stock-bond correlations in Europe, 2000-2019

Stock-bond correlations in the U.S. and Europe, 2000-2019

Past performance is not a reliable indicator of current or future results.
Source: BlackRock Investment Institute, with data from Refinitiv Datastream, September 2019. Notes: The charts show the correlations between daily percentage moves for stocks and bonds over a rolling one-year period. The dot shows the correlation over the most recent 90 day period. For the United States, we use the MSCI USA index for stocks and the 10-year Treasury for bonds. For the eurozone, we use MSCI Europe ex-UK index and the German 10-year bund. Indexes are unmanaged and not subject to fees. It is not possible to invest directly in an index.

Government bonds have played an important role in building portfolio resilience – even at ultra-low yields. In Europe, German bunds are less effective shock absorbers as yields approach their perceived floor.

Market implication: Government bonds play an important role in building portfolio resilience – even at low yield levels.

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What does this mean for portfolios?
Meet the authors
Philipp Hildebrand
Vice Chairman
Philipp Hildebrand, Vice Chairman of BlackRock, is a member of the firm's Global Executive Committee.
Jean Boivin
Jean Boivin
Head of BlackRock Investment Institute
Jean Boivin, PhD, Managing Director, is the Head of the BlackRock Investment Institute (BII). The institute leverages BlackRock’s expertise and produces proprietary ...
Wei Li
Wei Li
Global Chief Investment Strategist – BlackRock Investment Institute
Wei Li, Managing Director, is Global Chief Investment Strategist at the BlackRock Investment Institute (BII).
Vivek Paul FIA
Vivek Paul FIA
Director, Senior Portfolio Strategist for the Portfolio Research Group within the Blackrock Investment Institute (BII)
Vivek Paul, FIA, Director, is Senior Portfolio Strategist for the Portfolio Research Group within the Blackrock Investment Institute (BII). The BII leverages BlackRock’s ...
Elga Bartsch
Elga Bartsch
Managing Director, Head of Macro Research of the BlackRock Investment Institute
Elga Bartsch, Managing Director, is Head of Macro Research of the BlackRock Investment Institute. Elga heads up economic and markets research of the Blackrock Investment ...
Scott Thiel
Scott Thiel
Chief Fixed Income Strategist
Scott Thiel, Managing Director, is Chief Fixed Income Strategist for BlackRock and a member of the BlackRock Investment Institute (BII). He is responsible for developing ...