skip to log on skip to main content

Trade war threatens stabilisation of global growth


24 May 2019

House view





A resurgent trade war coincides with early signs that global growth is no longer sliding, explains ANZ's chief investment office.

As this year has progressed sharemarkets have recovered from last year’s losses as investors anticipate improved economic growth. This optimistic expectation is supported by:

  • a pause in US interest rate rises
  • China stimulating its economy
  • greater confidence of a truce in the trade war between the two countries.

ANZ’s chief investment office believes a base in global growth is forming and there will be some improvement in companies’ earnings, as would be expected in a U-shaped market recovery, which we covered last month.

However, the escalation of the trade war – with markets already factoring in a truce – means if the recovery doesn’t progress as hoped we face elevated risk the nascent recovery will suffer.

We maintain a vigilant focus on these risks, given signs that any recovery would be subdued and that markets are already fairly valued.

ANZ investment strategy positions – May

With global markets around fair value and our economic scorecard still suggesting caution, we hold to our overall ‘neutral’ position towards growth assets such as shares. We lean toward global shares for now given Australia’s housing market and weak wages.

For us to take an ‘overweight’ position on growth assets we will need to see evidence of an established earnings-upgrade cycle for companies. This is particularly the case give the risks surrounding the re-escalation of the trade war.  For defensive assets we favour cash investing and are ‘underweight’ international fixed-interest investment this month.

Protect your future with risk strategies

Find out more

Investment position
Asset class Preference level Reasoning
Developed equities Overweight Valuations across most markets are at fair value although the US is on the expensive side.
Australian equities Underweight The outlook is improving, shares are fairly valued, but weak credit growth is a constraining force.
Emerging-market equities Neutral Valuations remain generally more attractive than developed markets.
Listed real assets1 Neutral Valuations in global listed property are now at the expensive end of fair value.
Alternative growth Neutral These assets should perform well if volatility were to return in the months ahead.
Defensive: fixed income
International Underweight Fixed income has been supported by slowing global growth and the oil price fall.
Australia Neutral Valuations are moderately expensive possibly reflecting markets shifting to a rate cut.
Cash Overweight Investors are not being compensated much for holding bonds over cash, so cash is providing a relatively good risk-adjusted return.
Foreign currency hedge ratio2 Neutral Our fair value estimate of the Australian dollar is at US78¢.


Equities, fixed income, cash and currency are relative to benchmark.

1. Comprises of 50/50 split between global real estate investment trusts and infrastructure securities.

2. Percentage of developed and emerging-market equities hedged from foreign currency into Australian dollar.

Representative diversified portfolio with 70/30 growth/defensive assets.

As at May, 2019.

Read the full Chief Investment Officer House View (PDF 197kB)


Mark Rider, former Chief Investment Officer

Mark brought over 30 years of investment market experience to ANZ, having previously worked at UBS and the Reserve Bank of Australia. During his seven-year tenure at ANZ Mark was responsible for and contributed to the overarching investment philosophy, investment strategy and asset allocation of ANZ Private Banking.


To discuss what this insight could mean for you, talk to your ANZ Private Banker directly, or contact us below

You might also like

Gradual economic recovery looks more likely

17 April 2019


There are signs that slowing economic growth could be at its nadir, and slow but steady progress upward could be the path forward.


Read more

Low inflation fuels long market rally

26 March 2019


The sharemarket rally is now 10 years old, ANZ’s chief investment office outlines what it needs to keep going or tip into a down cycle.


Read more

ANZ global market outlook 2019: a challenging year

19 February 2019


ANZ's chief investment office outlines the global outlook for 2019 as the global economy slows and the sharemarket is viewed with increasing caution.


Read more

Contact us

How to Become an ANZ Private Client

To find out more about how to become a Private Client, share your details here.

Request a call back


Email ANZ Private

Email us with your query and we'll reply to you directly.

Send an email

Call us

Speak to the ANZ Private team directly

1800 316 926

We're available weekdays 9:00am to 6:00pm AEST

Find an ANZ Private office

Our locations across Australia

Find an office

ANZ Private Bankers are representatives of Australia and New Zealand Banking Group Limited ABN 11 005 357 522 (ANZ), the holder of Australian Financial Services Licence number 234527. This document ("document") is distributed to you by ANZ and may not be reproduced, distributed or published by any recipient for any purpose.

The information provided is general in nature only and does not take into account your personal objectives, financial situation or needs. Please consider its appropriateness to you before making any investment decisions. It should not be relied upon as a substitute for professional advice. For any product referred to above, ANZ recommends that you read any relevant offer document or product disclosure statement and consider if the product is appropriate for you. For products issued by ANZ, these documents are available at This document is current as at the date of this publication but is subject to change. The document is provided and issued by ANZ unless another author is specified in the document, in which case it is provided and issued by that author. The views expressed are those of the authors only and do not necessarily reflect the opinions or views of ANZ, its employees or directors. Whilst care has been taken in preparing this document, ANZ and its related entities do not warrant or represent that the document is accurate or complete. To the extent permitted by law, ANZ and its related entities do not accept any responsibility or liability from the use of the information. Past performance is not indicative of future performance and any case study shown is for illustrative purposes only. Neither are a prediction of the actual outcome which will be achieved. Some of this information may have tax implications. We recommend that you seek specialist tax advice on how it may impact your tax obligations, liabilities or entitlements.