Global markets back on track
The US and major global markets should see a positive outlook over the next year and beyond, according to Lazard Asset Management, as the global economy and confidence in the global recovery have significantly strengthened since last year.
The key market developments, according to the company’s ‘Global Outlook 2018’, would include ongoing recovery in the US to last three to five years and Euro zone growth to be sustained thanks to an increased consumer and business confidence.
Also, Japan would continue its good recent performance with inflation heading for one per cent and China’s GDP growth would expect to excel again, albeit with some concern, the company said.
Lazard Asset Management’ managing director and head of US equities, Ron Temple explained: “The primary risk factors globally revolve around monetary policy, trade policy, populism and politics, and geopolitics.
“For investors, it is unfashionable to be bullish on equities with markets at all-time highs and valuations at premium levels.
“However, we see upside in global equities as earnings growth expectations are strong and as fixed income assets are even more expensive than equities.
“Regardless of the asset class, we believe security selection will be a critical component of generating reasonable returns in markets going forward, given the risk of drawdowns on the back of unforeseen events and as different countries and companies deliver varying degrees of growth.”
AUTHOR
Oksana Patron
Recommended for you
Infrastructure assets are well-positioned to hedge against global uncertainty and can enhance the diversification of traditional portfolios with their evergreen characteristics, an investment chief believes.
Volatility in US markets means currency is becoming a critical decision factor in Australian investors’ ETF selection this year.
Clime Investment Management is overhauling the selection process for its APLs, with managing director Michael Baragwanath describing the threat of a product failure affecting clients as “pure nightmare fuel”.
Global X will expand its ETF range of exchange-traded funds next month with a low-cost Australian equity product as it chases ambitions of becoming a top issuer of ETFs in Australia.
