Current Investment Traffic Lights
June 2025 – Asset Allocation Framework Highlights
Equities Developed Markets
In June, the stock markets in the USA, Japan and the global industrialized countries recorded price gains. Prices on the Swiss stock exchange fell. There was little change in the stock indices in Germany, the UK, the eurozone and Europe. New investor money flowed into all ETF categories. The exceptions were products based on UK equities and eurozone stocks, where the flow of funds stagnated. There was no change in the CIO View compared to the previous month.
Equities Emerging Markets
The prices of all emerging market indices rose in June and ETFs on the corresponding categories recorded capital inflows. The CIO outlook for emerging market equities remained constant compared to May.
Sovereign Bonds
The price performance of government bonds stagnated in June. Only emerging market securities recorded gains. There were capital inflows into ETFs on global government bonds and emerging market securities. Money flowed out of products on US government bonds in June, while there was hardly any movement in ETFs on German government bonds. The CIO view for emerging market government bonds changed from negative to neutral.
Corporate Bonds
US dollar bonds with an investment grade rating recorded a positive performance in June, while prices stagnated in the other categories. There were capital inflows into ETFs on high-yield bonds from the USA and Europe as well as European investment-grade securities. ETFs on investment-grade bonds from the USA recorded hardly any movements in funds. The CIO outlook remained unchanged.
Commodities
The performance of gold stagnated in June, while the broad basket of commodities recorded gains. Both products on gold and the broad basket of commodities attracted fresh investor capital. The CIO view on gold changed from positive to neutral.
The concept of the Asset Allocation Traffic Light
Defining and applying the correct asset allocation – that is, the distribution of the various components in a portfolio – can be crucial for a portfolio's returns. Risk diversification can be indispensable, and therefore more important than, the choice of a single correct investment exposure. Many investors now intuitively understand the importance of asset allocation in terms of establishing a risk-diversified portfolio. In this case, the Asset Allocation Traffic Light could serve as an information guide to assist in making future investment decisions. The Asset Allocation Traffic Light provides information at a glance on developments in the main equity, bond and commodity categories. To this end, three analyses are clearly summarised for a total of 29 categories.
Asset Allocation Traffic Light – Threefold information for investment decisions
- According to the CIO View:
The DWS Chief Investment Office (CIO) outlook for the next 1-3 months - How the markets performed in the previous month:
Performance of a representative index for the respective category in the preceding month (e.g. the MSCI World for global equities in developed countries) - What ETF flows were like in the global equity, bond and commodity markets: inflows and outflows in approx. 1,500 ETFs in the European ETF market in the previous month
Disclaimer
Source: ETF flows: DWS, Bloomberg; Performance: Reuters; CIO View: CIO Office DWS. China equity views are given relative compared to the MSCI Emerging Markets Index. All other equity views are given in relation to the MSCI AC World Index
Without limitation, information contained herein does not constitute an offer, an invitation to offer or a recommendation to enter into any transaction, nor does it constitute investment advice. The CIO View is a document produced for information purposes only and is not intended to be an offer or solicitation, or the basis for any contract to purchase or sell any security, or other instrument, or for Deutsche Bank to enter into or arrange any type of transaction as a consequence of any information contained herein. The information contained herein, inclusive of the CIO View, has been prepared without consideration of the investment needs, objectives or financial circumstances of any investor. Before making an investment decision, investors need to consider whether the investments are appropriate, in light of their particular investment needs, objectives and financial circumstances. When making an investment decision, investors should rely on the final documentation relating to the investment. Further information is available upon investor’s request. The "green" indicator for a category does not mean that DWS recommends an investment in a particular asset class and/or product. The "red" indicator for a category does not mean that DWS advises against an investment in a particular asset class and/or product. Past performance is not a reliable indicator of future results. Forecasts are not a reliable indicator of future results and no guarantee is assumed that forecasts and objectives will actually be fulfilled. Forecasts are based on assumptions, estimates, beliefs and hypothetical models or analyses that may prove to be incorrect. No guarantee can be assumed that investment goals will be achieved or earnings expectations met.
