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Luke Ng, FE Advisory Asia
Last year was a very good year for global equities, with little volatility and the MSCI All Country World up 23.07%.
However, investors saw volatility come back this year in February when global equity markets corrected around 10%.
“It will be harder for people to invest this year because of the higher volatility,” Luke Ng, senior vice president at FE Advisory Asia, told FSA. He added that there are also doubts that growth and momentum stocks, which outperformed last year, will continue to perform strongly this year.
It is likely to be a year of very particular stock choices because in general the US is overvalued and Europe’s recovery appears to be losing steam. Emerging markets are a favourite, but mainly the Asia component. In any case, the direction of the US dollar will clearly impact EMs.
However, equities are still preferred over fixed income amid the rising interest rate environment. For example, Bank J Safra Sarasin and Deutsche Wealth Management remain overweight in equities and more cautious in fixed income instruments.
Against this this backdrop, FSA compares two global equity funds: the Invesco Global Structured Equity Fund and the Morgan Stanley Global Opportunity Fund.