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. and euro area, 2000-2019

Stock-bond correlations in the U.S., 2000-2019
Stock-bond correlations in the 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 euro area, 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 implications
Government bonds play an important role in building portfolio resilience – even at low yield levels.
Market implication
Meet the authors
Philipp Hildebrand
Vice Chairman
Jean Boivin
Head of BlackRock Investment Institute
Elga Bartsch
Head of Macro Research
Scott Thiel
Chief Fixed Income Strategist, BlackRock Investment Institute