From political risks in many developed markets, concerns about valuations after years of loose monetary policy, and uncertainties around the Chinese economy and the rising dollar hanging over emerging markets, good growth is hard to find.
Investors have enjoyed higher than average returns with lower than average volatility in the years since the financial crisis, but as the severe market gyrations of 2016 have demonstrated, a new approach to constructing a global portfolio may be needed as we enter the new year.
In this, the latest in the series of What Investment guides, we discuss with Simon Edelsten, manager of the Artemis Global Select Fund, how best to build a global growth portfolio in these turbulent times.
We look at the themes that could be at the centre of future growth, such as ageing populations, rising technology, and the emerging market consumer.
The guide will examine the best ways to invest in those long-term themes, including whether the clutch of famous technology companies known as the FANGs (Facebook, Amazon, Netflix, Google) are a prudent investment at this time.
Chapter Two looks at the investment case for the emerging and frontier markets in the current climate. Those are areas of the world where real growth is happening, with young populations entering the workforce and the middle class. This chapter will examine where the investment opportunities are as a result of that trend, and whether now is the time to buy.
Many investors are put off emerging markets right now by the strength of the dollar, this guide will ask whether history will repeat itself and make that a legitimate concern for investors in the asset class.
After years in which the prospect of profound deflation, the election of Donald Trump in the US and the increased levels of government spending in the UK, indicates that the world could be about to see higher levels of inflation. The better than feared by many progress of the Chinese economy, coupled with commodity and oil prices that are rising from the depths to which they sank at the start of 2016 offer a further indication that higher inflation is likely to be upon us.
The weakness of sterling relative to other currencies means that overseas earnings may be worth a premium for the UK investor, but where are the reliable earnings and the how high a premium is worth paying for them?
This chapter will attempt to answer that question.
We look at whether inflation really will rise far enough to be a concern to investors in developed markets, how one should position their portfolio for such a scenario, and which stocks are likely to thrive in a brave new world of inflation.
Edelsten discusses the best ways to build a portfolio that is diversified enough to deliver strong returns, whatever the answers to those myriad questions,across the economic cycle.
The guide can be downloaded from globalgrowth.investmentintelligence.co.uk