Global equity markets have generally been robust this year, with the rising inflation and growth expectations moving them gently upwards.
Markets that were supposed to struggle have proved to be surprisingly buoyant, particularly the emerging markets. Japan has emerged from a period of profound slumber and is also delivering strong returns this year.
Indeed, the equity market that may be giving investors most cause for concern is the UK, where political and currency risks lurk noisily at the edge of the investment opportunity right now.
Yet just as the wall of worry around the investment case for UK assets rises, the private investor continues to be overweight UK equities relative to the rest of global markets.
Further reading: Avoiding the Pitfalls: Macro bets
This guide, produced by Old Mutual Global Investors in partnership with What Investment, looks at the opportunities available in global equity markets.
The speed and extent to which the US Federal Reserve is likely to put interest rates up will be a major driver of sentiment in global markets, while the recent improvement in the economic fundamentals of the Eurozone will reassure investors that the economic bloc, which has been in the shadow of almost continuous crisis since 2007, may finally be on the road to sustainable growth.
The Japanese economy has been at the mercy of the suite of policies known as ‘Abenomics’. After years of speculation, the market is now at a point where economic growth and stock market momentum have reached a level where investors are starting to wonder if the land of the rising sun is about to enjoy a sustained period as the land of the rising stock market.
Further reading: Avoiding the Pitfalls: Passive obesity
But there are also pitfalls aplenty, including geopolitical tension, central bank policy potentially going awry and the rise of populism.
That cocktail of concerns is happening at a time when valuations are certainly nearer the top of their long-run averages in the US and the UK. Emerging market equities are traditionally viewed by the market as likely to do badly when US interest rates are rising; that hasn’t happened yet, but what if it does?
High commodity prices have boosted the investment case for emerging markets, but inflation not quite hitting the heights expected and the present tumble in the oil price may cause investors to pause for thought.
Further reading: Avoiding the Pitfalls: Investment style bias
Ian Heslop, head of global equities at Old Mutual Global Investors, focuses the content of this guide on how investors can avoid the pitfalls present in global equity markets while still being able to build a diversified portfolio for growth.
He examines the valuations in different parts of the market and digs deep to look at what the economic statistics are really telling us.
In this global equities free guide:
- We explore the outlook for some of the largest markets around the globe
- We analyse current valuations
- We look at sectors such as technology, which have been a source of growth for some time – can that continue?
This guide looks at the big trends that are moving the share prices of global companies, using a data-driven approach to unearth value.
>Download: Investing in Global Equities Guide [pdf.]