Expected slowdown causes investors to flee equities
Institutional investors are reducing their exposures to equities as part of an expected global economic slowdown, according to research released by State Street Corporation.
Carlin Doyle, the macro strategist for State Street, said State Street’s cross border equity flows indicated that investors are displaying risk-averse tendencies and abandoning emerging market equities. Indicators are at multi-year lows, which suggests below average growth through next year.
However, the departure from equities is expected to shore up a weak United States (US) dollar, while dropping commodity prices will cause inflation to drop, as well as challenge the strength of the Australian and New Zealand dollar and the South African rand. The Japanese yen may strengthen due to the shift to anti-risk currencies, and US investors will move their overseas equities surplus to safer markets.
The global credit crisis will also impact emerging markets, which were most uncontrolled during good times, Doyle said.
Recommended for you
With active ETFs becoming the latest choice as fund managers target the retail audience, their high fees may be a detractor as research finds investors are shunning those priced any higher than 50 bps.
The possibility of a dissenting vote from shareholder L1 Capital has led Platinum Asset Management to scrap its conversion plan for the $450 million Platinum Capital LIC into an ETF.
Family office Lederer Group has made an off-market takeover bid for ASX-listed Elanor Commercial Property Fund, with chair Paul Lederer taking exception at the firm’s lack of accountability, oversight and transparency.
Janus Henderson is actively seeking to partner with private wealth firms in Australia as it looks to expand its number of strategic partnerships, as well as focus on retirement income product development.
