- In equities we favour companies with low leverage, resilient earnings, the conventional defensive stocks, especially those with an eye to Asia.
Long-term outlook: Bearish
- In the long term, which is about 18 months in our thinking, we will remain in a very below trend growth world as the deleveraging cycle continues and that will be a drag on activity.
- I don’t see where growth is going to come from. This has implications for assets in that you do not want to be strategically long on sensitive assets, you want to be in quality income-related assets that are more insulated from market shocks, though there are less likely to be any huge systemic risks than in the past few years.
Thomas Becket - Psigma Investment Management
Three-month outlook: Neutral
- In the short term, I expect more volatility, though any market correction will be relatively shallow. We continue to feel that markets are consolidating, but do not see an immediate threat of a strong sell-off (greater than 5 per cent). This is making “trading” harder in the short term as neither the earnings season nor the economic data was positive enough to drive the markets higher, or down for us to “re-load risk”.
- We are running with our highest ever proportion in global equities over UK, although our start of year “cautious optimism” still dominates our thinking and investment strategy.
Long-term outlook: Bullish
- We do not expect politics to ruin what should be a positive year for equity markets, but they certainly have the ability to create another surge of volatility and sleepless nights.
- Japan has shown that politics can add to the opportunities that we can exploit in global markets, but sadly it will also add to the volatility. Markets should continue to make headway in 2013, as long as there is not a huge political mistake. Through the year we hope to receive confirmation of an economic recovery and inflation-fearing investors will continue to rotate away from fixed interest investments into equities.
Mark Robinson - Berry Asset Management
Three-month outlook: Bullish
- We have had maximum equity exposure across all our strategies because we have seen the three main risks moderating; the eurozone crisis, the hard-landing risk in China, which we always believed they would avoid, and the US political infighting that led to the credit rating downgrade.
- In the short term we have turned the gas up slightly away from defensive income assets to more growth orientated funds, though it is a gradual move. We have also been moving some of our UK equity exposure into more international focused funds, especially European funds.
Long-term outlook: Neutral
- In the long term I’m very positive for the opportunities in the markets, but I expect there will be a fair bit of turbulence along the way. Within fixed income, we are holding index-linked gilts as we believe there will be further quantitative easing from the Bank of England that will help the asset class, and most of our fixed income exposure is through unconstrained strategic bond managers.
