DFAS - Look to small caps with central banks weak dollar among 2024 macro risks - Ned Davis Research

2024-01-09 14:47:02 ET

Ned Davis Research highlighted on Tuesday what it sees as the top macro risks for 2024. The financial institution listed restrictive central banks, a weaker dollar and liquidity issues as the main threats to market gains.

See below the three macro risks of 2024 that Ned Davis Research listed:

1. “Central banks remain restrictive for too long driving their economies into recession.”
2. “A weaker USD keeps inflation uncomfortably above the Fed’s target disappointing markets.”
3. “Central banks drain liquidity from markets tightening financial conditions.”

NDR noted that the above risks listed could present challenges to policymakers and investors this year.

As a result of its risk concerns, NDR also shared its asset allocation recommendations. The financial institution currently recommends a portfolio with 70% stocks and 30% bonds. Moreover, NDR went on to express that it favors small-caps over large-caps and holds a neutral stance on growth versus value.

For investors who share a similar viewpoint, see below a grouping of small cap exchange traded funds that may be worth analyzing in further detail.

Small-Cap ETFs: ( IWM ), ( IJR ), ( NYSEARCA: VB ), ( NYSEARCA: VBR ), ( NYSEARCA: VBK ), ( SCHA ), ( IWO ), ( SPSM ), ( AVUV ), ( FNDA ), ( DFAS ), ( CALF ), ( NYSEARCA: VIOO ), and ( AVDV ).

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