Looking past interest rate hikes

Equities will perform better once interest-rate jitters settle; earnings are what count now, says Citigroup AM.

Anthony Muh, regional head of investments at Citigroup Asset Management, believes economic growth will cool off at a sustainable rate rather than overheat and crash, setting the stage for relatively better performance in the equities markets.

He emphasizes that despite expectations of US short-term interest rates rising another 75bp to 100bp this year, his balanced funds are not underweight bonds, although his position has been defensive, holding short-duration securities. But the prospect of rising bond yields...

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