If the trade war ceasefire established between the US and China late last week remains stable going into 2019, Macquarie believes the best opportunities could be found in the US.
Macquarie’s 2019 global investment outlook said strong pent-up demand among US corporations for making capital expenditures would extend into 2019, and the country’s rally wasn’t over.
Cyclical trends also suggested greater recovery potential in non-US markets like Europe and Japan as well, as they had experienced more extended recovery periods than other regions, and continued to benefit from ongoing stimulative monetary policy.
Global trade wars or an overly aggressive Federal Reserve are still risks, but the outlook suggested inflation would finally end the bull run.
“Rates are still historically low in the US, and many foreign countries have bond yields near zero, so while corrections can happen at any time, Macquarie does not believe the US is nearing a recession or bear market and growth-oriented companies should do well,” said the outlook.
Data from FE Analytics shows the top performing global equity fund for the year to last month’s end was AMP Capital’s Global Equities fund, which returned 18.88 per cent, followed by Hyperion Global Growth Companies, which returned 18.17 per cent, and AtlasTrend Big Data Big fund, which returned 15.69 per cent.
Magellan’s Global fund, which was in the top five and had sat in the top quartile for the ten, five, three, and one-year to last month’s end, and for the six and three months to last month’s end for that matter, returned 10.17 per cent for the year to last month’s end.
It invests just over two thirds of its portfolio in North America, with 9.48 per cent in Europe, and 2.51 per cent in UK, and among its top holdings are Facebook, Alphabet, Apple, Visa, Starbucks and Microsoft.
Bell Global Equities sits in the top ten for performance, and invests 63.78 per cent of its portfolio in North America, suggesting investors are also finding the most opportunities in the US, followed by Europe (22.47 per cent), the UK (7.5 per cent) and Japan (1.36 per cent).
The chart below tracks the performance of the MSCI World Index and the global equities sector average for the year to last month’s end.
