Virginie Maisonneuve identifies key drivers for success in 2012…
Virginie Maisonneuve, Head of Global and International Equities
Sign up for our weekly Newsletter and receive the latest ETF and ETC news.
Click here to register for your free copy
For professional investors and advisers only.This document is not suitable for retail
1. Volatility will continue to be driven by Europe and sovereign issues; the fear of China’s hard landing; and the impact of many elections in the world.
3. Make sure you own enough US stocks. The US is recovering slowly but is ahead of Europe.
4. Be prepared to add to emerging markets as the year progresses. Monetary policy should loosen as inflation trends downs. Gain exposure either through stocks listed in emerging markets or via companies in developed markets with large exposures to emerging markets. Get the best stocks wherever they are listed and don’t contain yourself to one region.
“We believe volatility will remain well into the first quarter of this year as the markets gauge the resilience of the European and global financial system, and how it will cope with potential additional shocks. There will be three main causes for the continuing volatility: first, the future of Europe; second, the US elections; and third, the nature and effect of the slowdown in Chinese growth.”
5. Test your stock earnings growth assumptions rigorously. Be ruthless! Consider current stock prices compared to 2008 valuations and margins.
6. Take advantage of extreme valuations: for example, equity risk premium in Europe is at an all-time high. When markets are very gloomy and discount the worse, the risk is on the upside.
7. Stick to fundamentals: when fear runs equity markets, the disconnect between prices and fundamentals can offer great opportunities.
8. Watch currencies: They influence competitiveness. A weak Euro is good news.
9. Monitor the ‘EPF’ i.e. the balance sheets of the European Central Bank, the People’s Bank of China and the Federal Reserve, as well as sovereign bond issues.
10. Be prepared to act on mini cycles: The situation in Europe will be uncertain for a while and equity markets will move on macro economic news.
Disclaimer:
The views and opinions contained herein are those of Virginie Maisonneuve, Head of Global and International Equities and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds.
For professional investors and advisers only.This document is not suitable for retail clients.
This document is intended to be for information purposes only and it is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Schroder Investment Management Ltd (Schroders) does not warrant its completeness or accuracy. No responsibility can be accepted for errors of fact or opinion. This does not exclude or restrict any duty or liability that Schroders has to its customers under the Financial Services and Markets Act 2000 (as amended from time to time) or any other regulatory system. Schroders has expressed its own views and opinions in this document and these may change. Reliance should not be placed on the views and information in the document when taking individual investment and/or strategic decisions. Issued by Schroder Investment Management Limited, 31 Gresham Street, London EC2V 7QA, which is authorised and regulated by the Financial Services Authority. For your security, communications may be taped or monitored.
Source: ETFWorld – Schroders
Subscribe to Our Newsletter
