Deutsche Bank – Synthetic Equity & Index Strategy – Global TAARSS says prefer Intl DM and EM equities in May. The Flow Whisperer – TAARSS says prefer Intl DM and EM equities in May
04 May 2015 (22 pages/ 827 kb)
Tactical Asset Allocation Relative Strength Signal (TAARSS) Monthly Update
Top recommendations for May: Intl DM, EM, Hong Kong, and Indian equities, and Energy Commodity.
Market review
Risky assets had a good month in April with Global equities (ACWI) and Commodities (DBC) advancing by 2.9% and 7.1%, respectively. While US bonds (AGG) edged slightly lower by 0.3%.
TAARSS rotation strategy monthly performance review
The monthly equity regional and market, and the commodity sector TAARSS rotations recorded the best results of our model for the month of April.
Tactical positioning for May 2015 based on TAARSS
This month in global equity markets prefer Intl DM and EM, and stay neutral to the US. Region wise prefer Europe and Asia Pacific, with some Latin America exposure, while keeping a minimal allocation to North America. In US equities prefer Small and Mid caps over Large caps. Sector wise Defensives ex Utilities present the best support in the US, especially Telecom. Domestic Cyclicals are experiencing some selling pressure. In Intl DM countries prefer Hong Kong, Japan, and Germany. Within EM countries, most of them experienced positive support with India continuing to show strong investment demand support despite its second month of performance setback; in addition, China, Mexico, and Russia also exhibited some noteworthy support. In Fixed Income we did not see any notable flow trend readings. Within commodities, we saw some positive developments for energy. See Figure 13 and Figure 14 for full allocation details for the month of May.
