The FSA Spy market buzz – 1 November 2024
Battleshares’ old versus new, Goldman Sachs’ Cassandra warning, Hong Kong property’s negative equity woes, Ninety One’s trillion-dollar question, Contrarian alert from CB, Lists and much more.
Positive sentiment surrounds global equities.
Tony Finding, London-based multi-asset portfolio manager at M&G, said that there are more opportunities in global equities than in fixed income. He believes that fixed income offers very low yield and cannot deliver the same level of diversification that they have delivered historically.
In Asia, Korea is one of his favourites, as it is one of the cheapest markets in the region. He also likes Japan due to improving corporate profits.
In the US, given generally high valuations, Finding prefers to find opportunities at the sector level, and he singles out financials and technology.
The outlook in European equities is also positive. Luca Paolini, Pictet Asset Management’s London-based chief strategist, said that European equities are cheaper than US equities and “could be the trade of the century”.
Participants at the FSA Long-Term Investing Forums in Hong Kong and Singapore also expressed positive sentiment toward equities over the next 24 months.
Sentiment for global equities is indeed running high and it could be the reason for historically low volatility. It is precisely the low volatility and high valuations that has a chorus of voices warning of a possibly severe market correction.
Marco Pirondini, head of US equities for Pioneer investments, wrote in a research note that “a 5-10% correction could occur this year given the likelihood that Trump economic policies will at a minimum be delayed.
“Emerging and European markets are likely to decline more than US equities, in our opinion, given their recent performance.”
Against this backdrop, FSA provides a comparative analysis of the Investec Global Franchise fund and the Natixis Global Asset Management – Harris Associates Global Equity fund.
Battleshares’ old versus new, Goldman Sachs’ Cassandra warning, Hong Kong property’s negative equity woes, Ninety One’s trillion-dollar question, Contrarian alert from CB, Lists and much more.
Part of the Mark Allen Group.