The investing landscape will remain uncertain for the rest of 2019, particularly with bond and equity markets sending contradictory signals, according to GSFM and its partners Munro Partners, Payden & Rygel, and Tribeca Investment Partners.
Stephen Miller, GSFM adviser, said diversification in portfolios was important given the high level of uncertainty.
“In the near-term, investors need to grapple with ongoing trade tensions, potential ‘currency wars’, political dysfunction and escalating tensions in the Middle East,” Miller said.
Nick Griffin, Munro Partners chief investment officer, said the outlook for global markets was uncertain with trade tensions continuing to dominate, with the last nine months being a period of heightened volatility.
“The key risk to this outlook is that sub-par growth ultimately turns into negative growth as policy missteps continue to escalate,” Griffin said.
However, he said this environment would actually favour growth equities, because low interest rates meant investors were attracted to and prepared to pay more for scarce growth assets.
“The Munro Global Growth Fund seeks to find these scarce growth assets by identifying some of the key structural changes in the world today and the resulting investment beneficiaries,” Griffin said.
They expected US gross domestic product (GDP) to slow, while growth in China and Europe would stabilise in H2 2019.
They also expected the Federal Reserve in the US to lower rates in order to foster economic growth and sustain the cycle.