The PARSUMO Contrarian Indicator Equity (PCE) is currently showing an equity ratio of 44,8%, which might lead to slightly positive equity index returns over the next 12 months. After the second consecutive decline, the PCE is showing a more favorable environment for equities.
The quarterly published NZZ Anlagepanorama, which offers an overview of the equity ratios recommended by banks and asset managers, fell in the second quarter of 2017 in comparison to the previous quarter. The average recommended equity ratio for a mixed portfolio is 44,8%, still above the historical average and indicative of the current preference for equities, which appear the most attractive alternative in today’s low interest rate environment.
As of this quarter data provided by Raiffeisen and Rothschild Bank Zurich is included in the calculation, giving thus a more accurate picture of the investment recommendations.
Our analysis of the historical data shows, that a recommended equity ratio of 44,8% could lead to positive, however below-average, equity index returns over the subsequent 12 months.
The expected MSCI World index return over the next 12 months resulting form the equity quota is +1,0%. The PARSUMO Contrarian Indicator Equity recommends a neutral equity weight as the expected return is well below the long-term average index return of the MSCI World.
Note: PARSUMO Capital does not recommend making investment decisions based solely on this indicator. The conclusion from this indicator may differ materially from our Risk Regime Investing approach (RRI), especially regarding investment horizons.
Jacques Stauffer, CEO
PARSUMO Capital AG
Förrlibuckstrasse 30, 8005 Zurich
Tel. +41 43 288 29 00