van Eyk's word of caution for global equities investors
van Eyk Research has sent out a word of caution to investors in global equities, warning them that fund managers who performed well in last year's risk-averse markets could be this year's laggards.
According to van Eyk's senior investment analyst Chris Bigg, this could happen if concerns over European sovereign debt continue to dissipate and markets rise this year.
Global equities have risen significantly so far in 2012, although van Eyk believes the risk of another 12 months of flat or falling equity markets remains significant.
Bigg noted that managers with an investment style biased towards larger "quality" stocks outperformed in 2011.
However, managers biased towards these companies are likely to underperform their benchmarks if markets rise this year, according to Biggs.
"Investors need to make sure their portfolios are not too heavily exposed to quality-biased managers if they are concerned about the potential for lagging the benchmark in a recovering market," he added.
The researcher had recently released its Strategic Asset Allocation review, which recommended that 17 per cent of a balanced fund be allocated to international equities.
AUTHOR
Staff Writer
Recommended for you
T. Rowe Price believes Australian growth is successfully managing to shrug off consumer weakness, but the firm’s multi-asset team is not yet positive enough to increase its underweight position.
Iress has issued an update denying the validity of “certain statements” made by an alleged threat actor, following a cyber incident last weekend.
The latest budget papers have outlined a $10 million provision for ASIC greenwashing enforcement activity as well as funds for a sustainable labelling regime to be partially met by industry levies.
Betashares has expanded its fixed income solutions with the launch of a new ETF offering exposure to subordinated bonds issued by the big four Australian banks.
