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17 December 2018

Investment Outlook 2019 - A Smithfield Report

Financial

Edelman’s specialist capital markets and financial services communications team have produced a compilation of investment outlooks for 2019 from their wealth and asset management clients.

For those wondering what the economic outlook looks like for next year and who are seeking clarity on global growth prospects and key drivers for investment, we have compiled a book which shares thoughts from the most experienced and respected wealth and asset managers in the UK on everything from UK and US equities, bonds and commodities to Europe, emerging markets, Vietnam, technology, property, gold, and the issues impacting responsible investment.

The firms whose thoughts on different asset classes make up Smithfield’s ‘Investment Outlook 2019’ book collectively manage trillions of dollars across myriad investment strategies. It would be facile to attempt to capture an overarching view across all of them and it would also fail to acknowledge the nuances of their individual approaches and priorities when managing money.

Nevertheless, some notable common themes emerge.

The bull market is set to extend – although investors point to a slowing of growth and an increase in volatility as late cycle dynamics become more prevalent. Richard Buxton at Merian Global Investors anticipates we are in line for an economic “soft landing”. Red October, in his view, could be a “pause that refreshes” the markets. This tallies with our own research, canvassing the thoughts of over 100 U.K. investors; although 82% forecast the end of the bull market within two years, 55% were optimistic about the next twelve months.

Brexit, whilst referenced by a number of contributors to this book and clearly important, is not seen as the dominant political risk for investors – even in Europe. Alex Ross at Premier notes the impact Brexit has had on the volatility of U.K. real estate securities but, equally, identifies a number of “opportunity vehicles” in the sector where valuations in some highly resilient assets have sunk to attractive levels. The political situation in Italy is referenced by Seema Shah at Principal Global Investors as one which could lead to a “market crisis or a European crisis”, with a Corbyn-led Labour Government representing a greater danger domestically than Brexit. Eoin Murray at Hermes highlights the way in which governments and companies address climate change as major factor in investment decision-making in 2019. This view chimes with our investor research which found that 75% of fund managers now see ESG as a key driver in their investment decisions.

Read the full report below:

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