Standard Life Investments believes that although emerging market concerns have recently affected market sentiment, investors should remain confident about the longer term fundamentals that drive positive returns in portfolios.
The latest edition of Global Outlook emphasises that, in a change from recent years, big macro calls are becoming less important for client portfolios and more focused decisions are now required. While retail investors continue to seek opportunities to move from fixed income into equity and real estate, many pension fund clients are considering the timing of moves into bonds for liability matching or other regulatory reasons.
Andrew Milligan, Head of Global Strategy, Standard Life Investments, said:
“Helped by an improvement in capital spending as firms become more confident, the global economic recovery looks set to remain intact into 2014. It is our belief that investors now need to be as granular as possible in their thinking and an unconstrained approach would be more sensible than buying the whole index. Our funds are therefore becoming more focused in terms of regional and country sectors and stock selection.”
“There have been no major changes to the House View. The broad preference is to be Heavy in equity and real estate and Light in fixed income. However there are opportunities in European government bonds and parts of the emerging market debt and high yield debt markets. Within equities, the preference is for developed markets, especially the US and UK, versus emerging markets.”