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Anticipate your clients' tax questions on Social Security, annuities and a range of investment products
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A deep dive into how advisors can best serve the evolving needs of their wealthiest clients
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Anticipate your clients' tax questions on Social Security, annuities and a range of investment products
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Go deeper on emerging topics, as well as key firms and thought leaders
A deep dive into how advisors can best serve the evolving needs of their wealthiest clients
Tax Facts
Anticipate your clients' tax questions on Social Security, annuities and a range of investment products
Popular Financial Topics
Go deeper on emerging topics, as well as key firms and thought leaders
December 04, 2018 at 12:02 PM
Cash isn’t only a safe place to invest, it now offers a better risk-adjusted return than equities, according to JPMorgan Asset Management.
That was highlighted by the firm’s multi-asset strategy team, with $260 billion under management, which upgraded its recommendation on U.S. cash to overweight for 2019.
For the first time in a decade, investors can get a lot more from safe, liquid securities than from the S&P 500 Index, adjusted for volatility, they argued.
“Our cash and duration overweights really distill down to overweights in U.S. cash and Treasuries, where ex-ante Sharpe ratios are now well ahead of those for U.S. stocks for the first time in a decade,” according to John Bilton, head of global multi-asset strategy at JPMorgan Asset Management. A Sharpe ratio is a measure of an asset’s performance relative to its volatility.
The team said it’s preparing “for an environment of slowing earnings growth and rising macroeconomic risks” that will weigh on equities, and has led the group to de-risk its portfolios.
If they are right, being boring may turn out to be the key to success next year, just like in 2018. U.S. Treasury bills were poised to end the year with the highest risk-adjusted returns of the world’s biggest assets, according to data compiled by Bloomberg.
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