Perspectives

Seasonal patterns for the last four years have suggested a period of economic slowdown during the middle two quarters of the year, bringing about a corresponding decline in government bond yields and a drop in risk asset prices. This time, though, it might be different.

At Newton, we believe our use of themes is invaluable in helping us to gain perspective on the important risks and opportunities in investment markets.

Another late-night meeting over a weekend resulted in a last-minute deal for Cyprus. The best that can be said about it is that it is better than the one the previous weekend, but the side effects may still be worrying over the longer term.

At first glance, perhaps there is little in common between the Hundreds Years' War between France and England and the current deleveraging phase in financial markets. We are certainly not going to suggest that they will be measured over the same time frame, but there are some similarities we can identify and analogies we can draw.

Against a backdrop of deleveraging (debt reduction) in much of the developed world, we anticipate lower returns and greater volatility in financial markets in the years ahead. We believe these characteristics count strongly against passive approaches to investment.

The actions of policymakers to avert the worst possible consequences of the global credit crisis of 2007 amount, we assert, to a form of 'financial repression', interfering with the free-market pricing of debt and currencies.

Dennis Turner is former chief economist of HSBC. He spoke at our annual investment conference in November, and we caught up with him again at the beginning of the year to ask him about the outlook for the global economy.

At our annual investment conference in November 2012, Simon Pryke, our chief investment officer, and Charles French, our global financials analyst, presented a session entitled A perspective on returns, which brought up to date the ideas we discussed in our paper of the same title at the beginning of 2012. In this article, we provide a summary of the session and explain why we believe a new perspective is required on investment risk and return. We explore the distortions we believe are inherent in financial markets and their implications for investors.

Since the credit crisis in 2007, equity markets have started each new year with optimism about economic prospects, prompting calls for the mythical "bond vigilantes" to show their colours by dumping government bonds.

With the US election out of the way, we have returned to status quo: not the iconic rock band, but an environment of high debt, fiscal austerity and central banks experimenting with monetary policy. The political landscape in the US has changed marginally, but the country still has the same president, the same division of control of the legislative houses, and the same person in charge of the Federal Reserve.

Welcome to the October 2012 edition of inPerspective, Newton's newsletter for the UK institutional market.

Welcome to the July 2012 edition of inPerspective, Newton's newsletter for the UK institutional market.

In recent months, the eurozone's debt crisis has escalated significantly, creating great uncertainty for its citizens and financial-market participants alike, and raising serious doubts about the survival of the currency bloc in its existing 17-nation form. In this article, we consider the origins of the crisis, the prognosis for the eurozone, and the implications of the region's challenges for investors.

Simon took over as Newton's chief investment officer earlier this year. In this interview, he discusses his role, the financial-market outlook for clients, the evolution of Newton, and life at home in the north Essex countryside.

Penny Green is the chief executive of the Superannuation Arrangements of the University of London (SAUL), a multi-employer pension scheme with over 32,500 members. In this interview, Penny shares with us her opinions on some key challenges and areas of positive development affecting the pensions industry.

Welcome to the May 2012 edition of inPerspective, Newton's newsletter for the UK institutional market.

As we enter another round of anxiety about Europe, should we be more concerned this time?

Emerging markets have, so far in 2012, staged an impressive rally. In this article, we set out the reasons for our positive outlook on emerging-market government bonds (the "ladders"), we address areas of potential threats (the "snakes"), and we explain why we believe emerging-market ("EM") bonds have the potential to outperform their developed market peers in the medium term.

In this paper we consider the longer-term attractions of harnessing income from investing in equities.

Welcome to the January 2012 edition of inPerspective, Newton's newsletter for the UK institutional market.

In many developed economies, a process of deleveraging (debt repayment) is under way which we believe will have highly significant consequences for investors.