The prospect of ‘Trumponomics’ powered equity markets last year. ‘Macrononomics’ doesn’t only sound more like a real word, it could even have more powerful and longer-lasting effects. But the stakes are high.
Three years after launch, the New Capital Swiss Select Equity Fund is five-star Morningstar rated and has produced an annualised return of 14.19% since inception. How does the Fund’s biggest holding, ams, contribute to its performance?
During the week Theresa May formally triggered the start of the process that will take the UK out of the European Union, UK equity sentiment hit another record low. Return expectations for US equities also fell into negative territory.
Fund manager sentiment towards UK equities has reached its lowest point since the financial crisis. Asset managers expect the asset class to post a negative return over the next 12 months.
European equities are once again investors’ favourite, as the eurozone economy is showing signs of acceleration. US equity sentiment, meanwhile, has taken a hit.
Asset managers have upgraded their return expectations for European equities. They also believe the Trump rally in US equities has run its course.
Campaign group Better Finance has published the names of asset managers running so-called closet trackers: funds that closely hug an index. Some large asset managers are particularly well-represented on the list.
Amundi is to pay €3.54bn (£2.97bn, $3.74bn) in cash to acquire Pioneer Investments, which it says will make it the eighth largest asset manager in the world.
Despite all the talk about the US equity Trump-boost in recent weeks, Japanese equities are actually a lot more popular with asset managers. Their consensus is that they will return more than 5% in 2017.
Fund management companies expect the world’s highest returns over the next 12 months to be found in emerging markets. They have severely downscaled their return prospects for European equities over the past couple of months, apparently in response to the attitudes of their clients.
With government bond yields in developed markets at record lows, asset managers are more pessimistic than ever about return prospects for the asset class.
Asset managers have been too optimistic in their return forecasts for European and Japanese equities over the past 18 months or so. Despite having faced disappointing returns over the past year or so, they are not yet prepared to meaningfully lower their expectations.
