We use cookies to support features like login and allow trusted media partners to analyse aggregated site usage.
To dismiss this message and allow cookies to be used, please click "Continue".



Twitter board

Follow us
  • To read LGIM's take on alternative credit click here: https://t.co/UeMKBQuKmd https://t.co/HqpKasST687 days ago
  • Climate change, #MeToo, plastics: ESG in 2019 might sound like a repeat of last year but that is where the similari… https://t.co/JfbVlSHXvs8 days ago
  • Have you seen our latest property roundtable? Click here to read more: https://t.co/Brd4QkMsNk https://t.co/EleMsa1HZz35 days ago
  • Has the direct lending market become a victim of its own success? Read more here: https://t.co/55jXOQqnCr… https://t.co/3rDYQhcbgX38 days ago
  • Have you seen our latest roundtable? An investor sits down with fund managers and advisers to discuss real estate's… https://t.co/DZqJFjnCxP43 days ago
  • Decision-makers at key pension schemes share their views with Mona Dohle on how to pick the right manager and wheth… https://t.co/ZGCHhJMJCu45 days ago
  • Read our latest interview with Mark Mansley, chief investment officer of Brunel Pensions Partnership here:… https://t.co/0fKgRopmsW52 days ago
  • "ESG is a hot topic among investors, but it appears that trustees are yet to catch on. Mark Dunne takes a look at t… https://t.co/pKGoquOCMk58 days ago
  • "@BNPPAM_COM is launching a sustainable SME funding strategy to boost the economy and help investors escape the low… https://t.co/clDIoHPo6P64 days ago
  • "Pension funds, as long-term investors, could find themselves exposed under many of the potential future scenarios… https://t.co/d37su2PwsD65 days ago
  • As LDI strategies are gradually being replaced by CDI approaches, how are pension schemes managing the additional r… https://t.co/rlMnrBmr1d66 days ago
  • Emerging market debt is rapidly becoming a local currency market, but investors are still nervous about a US rate r… https://t.co/3coGF5Dq8n77 days ago
  • Have you seen our latest roundtable? We brought fund managers, consultants and trustees together to discuss emergin… https://t.co/BMLta4c9pm80 days ago
  • Does the turbulence hitting stock markets at a time of rising bond prices mean it is time to ditch multi-asset fund… https://t.co/GiSdFpE01N86 days ago
  • More and more pension schemes are increasing their allocations to private equity, but will the illiquid strategy br… https://t.co/8l8TI75r9v92 days ago
  • Border to Coast Pensions Partnership CEO Rachel Elwell tells Mona Dohle about the challenge of developing a common… https://t.co/nQZfFveQdz93 days ago
  • Out now- The portfolio institutional October issue featuring our cover on ESG and fixed income: Breaking new ground… https://t.co/hnmwYclXS594 days ago
  • Friday View: ESG in fixed income: The new frontier - LGPS bolster infrastructure collaboration - EM Roundtable: The… https://t.co/zxvEKaZkoM97 days ago
  • Local government pension scheme (LGPS) pool Border to Coast has appointed the first external managers for its £1.2b… https://t.co/eBAbx0ubzJ97 days ago
  • "Investors seduced by the impressive growth forecasts for emerging market economies should prepare themselves for a… https://t.co/7nAnrL8s7t98 days ago


Forecast: Cautiously upbeat

Forecast: Cautiously upbeat

Mark Dunne
Tuesday 23rd January 2018

Conditions are expected to support risk assets again this year, but investors are advised to carry a healthy dose of caution. Mark Dunne takes a look at what the next 12 months could hold for investors.

“Overall 2018 looks capable of being as rewarding for investors as last year, although it will probably be more ‘exciting’.”

Stephen Jones, Kames Capital

2018 could be another favourable year for equities, but the mood among investors is set to change. A backdrop of strong evenly-distributed global growth, a weak dollar, an improving oil price and low inflation will benefit risk assets this year.

However, with the growth cycle reaching its eighth year and with a tighter monetary policy investors should adopt a more cautious tone.

Equities in the eurozone, Japan and the emerging markets are favoured by economists and fund managers this year, believing them to be better value than those trading in the US and the UK. Developed market bonds and cash appear not to have made it onto many asset managers’ shopping lists this year.

The place to be in the fixed income space appears to be the emerging markets where local currency debt is expected to benefit from a weak US dollar and an inflation-free economic recovery.

“Overall 2018 looks capable of being as rewarding for investors as last year, although it will probably be more ‘exciting’,” Kames Capital chief investment officer Stephen Jones says.

Rising interest rates and fears that the US and North Korea could start firing nuclear missiles at each other did not stop the FTSE 100, S&P 500 and Japan’s Topix hitting record highs in 2017, largely thanks to positive profit surprises and a scarcity of volatility.

Things could be different this year says Jones, who does not expect to see many earnings surprises. “Forecasts for growth and profits are now much more realistic.

“It is probably naïve to anticipate that markets will go up in a similar ‘straight line’ as they did last year,” he adds.

Jones is not predicting a crash; nor is he ruling out further equity gains. “Investors should not lose faith in equities this year,” he says, pointing out that the economic outlook in Europe and Japan looks ‘solid’.

Bonds are another factor that could help equities maintain their attractive risk-reward profile, even at a time when valuations look stretched.

Jones predicts that bond yields will continue to support equities, unless there is a substantial rise in inflation, which he doubts there will be.

Page: 1 2 3 4

Leave your comment

View our comments policy

Please login or register with us to leave a comment. It's completely free!

Friday View

Friday View

Shareholder engagement: