• enzio von pfeil hong kong economist investment analysis consulting macroeconomist hong kong applied economics investment economics asia strategic asset allocation selection based on economics

    Enzio von Pfeil

    Strategic asset allocation

Dr. Enzio von Pfeil

A seasoned global economist. Enzio von Pfeil’s skill lies in understanding macro-economics, the business cycle and business operations. Hong Kong-based Enzio von Pfeil has an international education which culminated in studying inter alia under Prof. Friedrich von Hayek. He has a distinguished 30-year career (US, Germany, UK and Hong Kong) in macro-investment economics.

His understanding of currency, commodity, bond and equity movements as they relate to socio-political developments across the global economy, underscores the authority and integrity of his strategic asset allocation advice. 

Ninety per cent of your portfolio’s performance is determined by strategic asset allocation.

This is precisely where Enzio von Pfeil’s depth of experience in investment economics will help you.

Media Presence

Enzio von Pfeil is a professional speaker and provides comments on Reuters, Bloomberg, ChannelNews Asia and RTHK. Author of five books, and with a 30-year global career as an investment economist in the USA, Germany, UK and Hong Kong, Enzio von Pfeil is a professional speaker and commentator on Reuters, Bloomberg and ChannelNews Asia on economic impacts on markets, industry sectors and corporations.

Strategic Asset Allocation

End of QE: Stay long US Treasuries

Thursday, July 24, 2014

  1. Low inflation stays. On 2nd June 2014 we issued a missive about why bond yields will hover around the current 2.5% for a some years yet: low wages imply low (demand-pull) inflation - the type that the Fed can fight using primarily monetary tools. Indeed, this set of monetary tools constitutes very much the framework of our Economic Clock.
  2. Demand > supply.  We all know that prices move inversely to yields. And we all know that if demand exceeds supply, prices rise. Therefore, yields fall. QED.  They at least will stay constant, if not rise.
    • Demand.  There are $10.5 trn worth of Treasury bonds outstanding. That is about  twice the value of America's GDP. Roughly 60% of these bonds are held by the Fed, other central banks, sovereign wealth funds and currency reserve managers. These are long-term players who want a) quality paper and b) to match their assets to their liabilities. So they won't do anything once Quantitative Easing ends (probably) this October.
    •  Supply. This year, the Treasury plans to  issue a net $33 bn in extra Treasuries. That is an eye-popping 0.3% increase to the current stock of $10.5 trn in Treasuries.
    • Conclusion. With demand staying constant and supply increasing marginally, there is no reason for yields to lurch significantly one way or the other. Indeed, I would argue that with geo-political tensions rising, the demand for safe-haven assets such as US Treasuries surely must rise, n'est pas?
  3. Investment conclusion. With (demand-pull) inflation remaining low, and with demand exceeding supply of Treasuries, keep what you have and buy more. In this increasing geo-political turbulence, you will want to hold more safe-haven assets like US Treasuries.
  4.  Read more