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Investment Strategy

Published March 18, 2024 | 10 min read time

Weekly market insights and possible impacts on investors from the Wells Fargo Investment Institute Global Investment Strategy team.

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Equities Spotlight: Developed Market Equities appear cheap. And?

  • Whether we look at absolute or relative valuation metrics, Developed Market (DM) ex-U.S. equities are cheap. However, adding to an asset class based on cheapness alone is not a sound strategy.
  • For now, we are comfortable at neutral — which is a full allocation. Cheap valuations and poor sentiment should reduce downside risk while a lack of tailwinds will likely mute DM’s return potential.

Fixed Income: Little drama as the Fed meets

  • Absent stronger-than-expected economic or inflation data, we expect the Federal Reserve (Fed) to cut the federal funds rate at the June 12, 2024, meeting.
  • We continue to favor investment-grade short-term maturities. High-quality short-term fixed-income securities provide investors with an attractive yield, a yield that should remain relatively attractive given our expectation of a slower-than-normal rate cut cycle.

Real Assets: Update on the growth of spot-based bitcoin ETFs

  • Spot bitcoin exchange-traded funds (ETFs) have grown rapidly since the U.S. Securities and Exchange Commission approved 11 spot bitcoin ETFs on January 10, 2024.
  • If flows continue at their current rate, total assets under management (AUM) could soon surpass those of spot-based gold ETFs.

Alternatives: Private markets improve accessibility and liquidity potential

  • By offering greater accessibility and improved liquidity, semi-liquid private capital funds have seen significant growth in recent years.
  • We believe that the creation of semi-liquid funds provides more options for qualified investors.

Article written by:

Investment Strategy Analyst
Head of Global Fixed Income Strategy

Investment Strategy Analyst
Head of Real Asset Strategy
Global Portfolio and Investment Strategist