Banque Eric Sturdza’s investment strategies are guided by extensive research. Through our investment committee, we look at trends in the world economy to determine how assets should be allocated across investment classes, geographical areas and currencies. Discover our latest thinking on the global economy, markets and investments in our Insight Report.

  1. Monthly Newsletter, December 2021

    Déjà Vu…

    This is what investors may be feeling given the number of historical parallels between the current situation and the winter of 2020 health context in Europe, inflation at the end of the 1970s in the United States, or the situation in 2013 and the infamous “Taper Tantrum” for emerging assets... In this environment, which presents some similarities with certain past periods, yet remains very different, the message of diversification makes lot of sense: Continue to favour equities in a constructive medium- term approach, but do not forget to keep some safe havens like Gold, Yuan and Swiss Franc in your portfolio. Similarly, selectivity and a good mix of investment strategies also remain the order of the day in the fixed income and equity markets. Some of these aspects are further discussed in this newsletter.

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  2. Monthly Newsletter, November 2021

    What about inflation ?

    After a brief correction in September on the back of inflationary fears, the markets quickly recovered, reassured by solid quarterly results, and above all still supported by the abundant liquidity poured by central bankers but also the boosted fiscal stimulus measures. The acronyms TINA – There Is No Alternative – and FOMO – Fear Of Missing Out – are back on investors’ lips... But is it right to forget so quickly about this inflation topic ? We remain in the camp of those, expecting inflation to be slightly higher than expected but the acceleration phase to be transitory. The post-Covid bottlenecks and the recent evolution of commodity prices could nevertheless translate into a slightly longer than anticipated plateau phase. This rationale is driving our thought process on the topic and is accompanied by a heightened degree of caution with regards to this inflation issue and by an opportunistic positioning on themes that offer protection or indexation to inflation without distorting our allocations or overplaying this risk. We are discussing these topics and their implications in greater detail in this newsletter.

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    Diverging paths !

    From the start of the Covid-19 crisis it became apparent that the Chinese authorities would choose a very different path to that of the Western world to handle its economic aspects. Whereas in 2008 China had been the first to launch major stimulus plans, thereby helping to drive global growth, in 2020 the government proved less spendthrift and did not “monetize” the Covid crisis. At the same time the United States worked on stimulus packages worth several trillion dollars and sent cheques to American households in order to prop up consumption. So the same Covid-19 crisis elicited very different responses. The 2021 sequence is a sharp reminder, if any were needed, that China remains a very different animal: monetary policies decorrelated from that in the West, severe regulatory crackdown on Chinese tech and internet companies at a time when the FAAMG seem invincible, the list of departing trajectories is growing longer. There is often talk of confrontation between China and the United States; the current year 2021 also reminds us that their respective capitalist models are diverging slightly more each day. We are discussing these topics and their implications in greater detail in this newsletter.

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  4. Wealth Planning Newsletter:The Challenges Of Cross-border Planning, September 2021

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  5. Monthly Newsletter, September 2021

    Much crying but no signs of the wolf !

    This is how we could describe the situation on the financial markets in August. Investors were expecting a somewhat weak month, as it is often the case in summer with reduced liquidity and less market participants. They were disappointed... Usual patterns proved wrong and August happened to be a relatively quiet month in financial markets. This is all the more surprising as there were quite a few excuses to take some profits at the beginning of the month: Double-digit returns for most major markets, a more virulent and contagious Delta variant, tapering widely expected in the United States, increased regulatory pressure in China on certain sectors and geopolitical uncertainty with the fall of Afghanistan to the Taliban. We are reviewing these events in our latest newsletter but remain committed to our investment strategy. More than ever, our strategy continues to be guided by confidence in the continuing recovery, mitigated by vigilance regarding changes in US central bank policy and a possible resurgence of regulatory (China), pandemic or other risks…

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  6. Monthly Newsletter, August 2021

    Summer Hot and Cold Weather

    The offices that were beginning to fill up are emptying again in summer, helped by holidays and fears to see the Delta variant spreading. In this environment, the markets seem somewhat lost: Growth and inflation are rebounding strongly while long-term interest rates are falling; China continues to blow hot and cold ; equity markets are still on an uptrend, but with different drivers: Growth stocks are picking up (the “lower for longer” theme) while the cyclical and Value rallies seen early in the year are fading... We are discussing those topics in our investment newsletter. Last month, we indicated that as tapering approaches and as markets tend to be less liquid in a summer, financial markets were likely to be less buoyant, even though the earnings momentum remains strong. More than ever, this reflection continues to guide our strategy: confidence in a continued economic recovery mitigated by vigilance regarding an inflection in Federal Reserve policy and a possible slight resurgence of risks (covid-19, regulatory and policy).

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  7. Quarterly Outlook, Q3 2021

    End of the 1st Half, Start of the 2nd !

    Café terraces are lively, airports no longer look like abandoned stage scenes, in short, Europe is emerging from lockdown. Markets had anticipated this, and the strength of the European indices since autumn 2020 now seems justified by the observable improvement in the overall health situation. This period has been marked by quite a few confirmations and surprises, including a more hawkish FED and sooner than expected. We are coming back on these topics in this investment letter. As Tapering approaches, markets are likely to be less buoyant, even though the earnings dynamic will remain strong. This is what will guide our thinking in the coming period : confidence in a continued recovery mitigated by vigilance regarding an inflection in Federal Reserve policy.

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  8. Monthly Newsletter, June 2021

    Recent months were marked by announcements from the Biden administration regarding fiscal and stimulus policies as well as a busy calendar in terms of quarterly results. Lately the news flow has been punctuated by more macro publications, with sometimes contradictory signals...As markets fluctuate between the fears of overheating and secular stagnation depending on the latest macro data, selectivity and diversification remain the primary drivers of our investment policy. Seeking out differentiating investment themes such as bonds denominated in Yuan and maintaining a balanced geographic approach with a tactical tilt in favor of Europe illustrate this positioning. While avoiding market extremes, we continue to highlight the benefits of a so-called Barbell strategy, which consists in favoring both secular growth themes AND cyclical and value stocks. Those points are discussed in greater detail in this newsletter.

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  9. Monthly Newsletter, May 2021

    Nothing can be said to be certain, except death and taxes…

    Never has the old saying seemed so appropriate in the United States. Even though the country has launched a massive vaccination campaign on an unrivalled scale – nearly 3 million doses injected every day –they still hold the sad record of most deaths from COVID-19 with nearly 575,000 people. The country also seems to be on the cusp of a historical turning point fiscally-speaking. Indeed, the Biden administration intends to raise taxes on corporates and the wealthiest households. We are reviewing in this newsletter the potential implications of this important move and are discussing our asset allocation views in light of recent market events : Selectivity and geographic diversification in equities, Barbell strategy mixing secular growth themes with cyclical / value stocks. Diversified positioning in Fixed Income with a preference for credit risk and subordinated debt as expressed by investing in Corporate Hybrid Debt for more than a year. And finally a constructive view on Precious Metals, most notably on Gold.

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    Remember March last year ?

    This time last year, markets were sinking and volatility was soaring - the VIX index hit 85 at its highest level - and for a few hours, the WTI oil future contract was even trading in negative territory ! We have come a very long way since then, but although 2020 was a true one-off in terms of market behaviour, 2021 looks set to be anything but boring : rising long tern rates and US dollar, sector and style rotation... We are discussing these points in this new letter.

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  11. Monthly Newsletter, March 2021

    Inflation making a come-back or inflation fears ?
    Having been largely ignored in recent months if not years, the topic of inflation is back at the top of the agenda at the start of this year. This resurgence of inflationary fears has unsettled investors, or at least made them question their positioning. It seems that after years of subdued inflation, the markets had (almost) forgotten about it. But with bond markets under pressure, talks about sector & style rotation and commodity prices on the rise, very few asset classes have been spared the reawakening of investors. We are discussing these topics in this new investment newsletter.

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  12. Monthly Newsletter, February 2021

    Under the sign of transition
    This month of January could be described as such, as it marks not only the transition from 2020 to 2021 but also a significant rupture for health systems with the roll out of vaccine programs and obviously the political transition in the United States. This new year also marks the return of more visible speculative behaviors on selected market segments and stocks in the US. We are coming back on these various topics and their potential investment implications in this letter.

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    2020 in the rearview mirror, on the way to 2021 !

    The investor dreams of having the next day’s newspaper, fortunately (or not !) his wish is never granted. Indeed, when questioned early March 2020 about the COVID pandemic and its potential damages, the most optimistic of them would have likely missed year end market target levels by a wide margin. The MSCI World index is up 14%, Copper up more than 25% all this in the year of the strongest recession of the post-war period... Even the period between Christmas and New Year has been quite filled with a new stimulus package voted in the US and an historic trade deal between Great Britain and the European Union. In this document, we are looking back at 2020 and those recent events, to draw our roadmap for 2021 and we are highlighting in the process a few investment topics we find interesting in this environment.

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  14. Monthly Newsletter, December 2020

    Never Say Never Again.
    Film buffs will have recognised the title of the only “unofficial” opus in the James Bond saga. In this film, the late Sir Sean Connery played 007 for the last time in his career. The title echoes his statement after the film Diamonds Are Forever was released that he would never again play the role of James Bond.
    Never again. This is probably the same thought that American voters had after the election shambles of 2000 when they had to wait to find out the result of the presidential election. Never say never again… It also took several days for Joe Biden to be declared the winner this year. Few days later, equity markets melted up following the announcement by Pfizer and BioNTech of the initial results from their vaccine showing 90% efficacy, triggering a historical style and sector rotation in the process. We are discussing these investment topics in this letter.

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  15. Investment Focus – US Elections, November 2020

    Once again, the US elections turned out to be a good drama, full of surprises, one that Netflix could have produced. The Trump vote has once again been underestimated in polls. Initial market reactions were positive to what appears to be a seriously contested election result. As we write, Biden won the presidential race and Trump is contesting results in several states. This is a remake of the Bush/Gore scenario, another drama ! The Senate race is tighter than anticipated, raising the odds of a split Congress. We are reviewing these events, their potential implications and share our thoughts on the initial market reactions.

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  16. Monthly Newsletter, November 2020

    Like each year, we change the clocks, thus also marking the fact that we are entering winter. There’s no equivalent in China, where they prefer to stick to a single reading of the time throughout the country, Beijing time. As we are changing clocks, Covid-19 is again a concern with a 2nd wave in Europe. In the US, even if Joe Biden is leading over Donald Trump by 10 percentage points in national polls, his lead in key battleground states such as Florida is much more limited. No such uncertainties in China, with a COVID situation under control and an economy recovering strongly. After a brief jolt in September, no signs also of a 2nd wave for the financial markets in October, but volatility making a come-back with month-end sessions. We review the market-moving events of this month and discuss these investment topics in this letter.

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  17. Investment Focus – China, October 2020

    Time to look East when everyone is looking West ?

    This question summaries the dilemma investors are facing this month, as they are focused on the US election topic and potentially overlooking China’s merits. China appears to be coping quite well with the COVID-19 situation, while the US and the EU are still struggling with the pandemic. On the economic front, China is also standing out, being the only economy in the G20 expected to post positive GDP growth in 2020. We are discussing these points in this investment focus.

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    Stock market records in August, record temperatures in September, quite a summer in 2020 ! Indeed an exacerbated enthusiasm for technology stocks in August caused markets to surge. Since then, a healthy correction in tech stocks, the faster increase in Covid-19 cases most notably in Europe and fears of a disputed US election caused volatility to increase slightly and markets to consolidate. In this Quarterly Outlook, we come back on the recent market moving events and try to assess the various US election outcomes and potential implications.

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  19. Monthly Newsletter, SEPTEMBER 2020

    September is already here and the summer of 2020 is coming to an end. This period, traditionally a good time to rest, has been seriously disrupted by the COVID-19 pandemic: limited cross-border travel, no gatherings, face masks and protective measures not to be forgotten plus potential quarantine when you are back… Financial markets ignored these concerns and continued to move upward. We review the market-moving events of this summer and focus on the highlights of this “back to school” period.

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  20. Monthly Newsletter, AUGUST 2020

    Summer is settling in, and Covid-19 with it. The number of people infected worldwide exceeds 17 million and the number of victims is close to 700,000. Despite a resurgence of new cases, the pandemic seems to be under control in northern Asia and in Europe, with lockdown easing strategies under better control. The drastic increase in new cases in the United States, Latin America and India is more worrying. In the European Union, leaders agree on a historic recovery plan and take a first step towards European debt pooling. We are discussing those points in our monthly newsletter.

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  21. Quarterly outlook, 3rd quarter 2020

    Our last quarterly outlook was drafted against a backdrop of a dislocated stock market environment, with the (extremely volatile) Standard and Poor’s index trading 45% below its current level. The anxiety-inducing environment and strict lockdown unleashed the imagination and the pens of strategists, journalists and commentators of every colour and creed, rivalling each other in their efforts to describe the “post-Covid” world. Although we did not go so far as to engage in any perilous forecasts as to what the world would become, we did focus on the macro and investment lessons of this extraordinary situation. We are coming back on these investment conclusions in this investment letter and try to update them in light of the recent events.

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  22. Monthly Newsletter, June 2020

    Heading towards a precarious balance… This might be one way of describing the prevailing situation in recent weeks. After the initial shock triggered by the outbreak and then the lockdowns of populations around the world in an effort to curb the epidemic, the month of May has seen the initial phase of lifting confinement measures. This search for a precarious balance can be observed at a public health, economic and financial levels. We are discussing those points in our monthly newsletter.

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  23. Monthly Newsletter, May 2020

    An earthquake will very often be followed by aftershocks of varying intensities, a sign of the movements of the tectonic plates. The same goes for financial market crises where, after an initial stock market crash, the markets can be followed by both bounces and other downward movements and/or the crisis may start to affect other asset classes. In this respect, April proved to be both true to these principles and yet exceptional by the reaction of the equity and credit markets and by the dislocation that occurred in oil price. We are discussing those points in our monthly newsletter.

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  24. Investment Focus, April 2020

    On April 20th, the West Texas Intermediate price, the American crude oil benchmark, tumbled. More precisely, the WTI May 20 future contract ended the day in negative territory, reaching intraday USD -37.6. First take and implications of this unprecedented move.

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    Whenever a crisis arises, the very first reflex of any investor is to declare that it is like no other before it… before going on to compare it with previous crises.

    If we leave aside the human drama of the coronavirus crisis and focus on the stock market and macro-economic consequences, it might be tempting to assert that this episode scores fairly highly among the most brutal crises.

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  26. Investment Focus, march 2020

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    Coronavirus, a single situation, two different views…

    This is how financial markets’ attitudes to coronavirus can be summarized in a nutshell - at least until the last week in February. Equity and credit markets initially sent a generally reassuring message, regaining the ground lost in January. This optimism was not shared, however, by so-called “risk-off” assets (gold and US Treasury bills) which, far from losing ground, continued to rise.

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    So far so good – until now ...

    That is how investor sentiment could be summarised at the start of this year. Equity and credit markets are continuing in the same vein as in 2019, reaching new records and for the time being disregarding fears and geopolitical tensions. Only at month-end, the corona virus outbreak revives fears and bad memories from the SRAS.

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    2019 already in the rear-view mirror, what outlook for 2020 ?

    2019 ends on a positive performance for a large number of asset classes, in sharp contrast with 2018. In short, the global economy slowed sharply in 2019 but avoided recession. Once again the major central banks were very helpful, they are all now in accommodative mode. What should we infer for the 2020 outlook ?

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  30. UK General Elections, December 2019

    Results and implications

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  31. MONTHLY NEWSLETTER, December 2019

    The Trade War will not be happening...

    That is the mantra that investors seem to be repeating over and over this month. Indeed, the markets appear to have been buoyed by the prospect of finally seeing an agreement between the United States and China over the trade war.

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  32. MONTHLY NEWSLETTER, November 2019

    Deal or No Deal, that is the question

    A fitting summary of this month’s news that has been so dominated by 1– the possibility of the United States and China signing a “mini deal”, and 2– the prospect of a deal finally being ratified for the United Kingdom’s withdrawal from the European Union.

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  33. Investment Focus, October 2019

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  34. Quarterly Perspectives, October 2019

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  35. Investment Focus, September 2019

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  36. Investment Focus, August 2019

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