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17/01

A ‘great’ year turns into a ‘good one’ says Skandia Investment Group

Old Mutual Wealth Management investment manager Skandia Investment Group (SIG) believes that the global equity rally that began in early 2009 seems set to continue with recent Purchasing Managers’ indices suggesting strong global growth. Given its bullish view on global equities SIG is increasing its exposure to emerging markets.

17 January 2011

Wars and natural disasters take edge off a great year for equities.
SIG continues to overweight Emerging Markets.
Higher oil prices, nuclear uncertainty pose some risk to global growth.

Old Mutual Wealth Management investment manager Skandia Investment Group (SIG) believes that the global equity rally that began in early 2009 seems set to continue with recent Purchasing Managers’ indices suggesting strong global growth. Given its bullish view on global equities SIG is increasing its exposure to emerging markets.

The table below summarises SIG’s views for April:

 

Very positive

Positive

Neutral

Negative

Very negative

Top down

 

Equities

Bonds

Cash

 

Equity regions

Emerging Asia

Emerging EMEA, Latam, Japan

 

UK, Europe ex EK, US, Developed Asia Pacific

 

Bond sectors

Investment grade & high yield

EMD

Index-linked

 

Government

Currency

Emerging currencies

Commodity currencies, GBP

USD, SEK

Euro & Yen

 

Alternatives

 

Commodities, Property

     

James MillardSIG CIO James Millard said,

“We remain overweight global equities. The February Purchasing Managers’ Indices (PMIs) were very strong, suggesting that the global economy was growing very strongly in 2011 Q1. However, the earthquake in Japan and the rise in the oil price could turn what would have been a ‘great’ year for global growth into a ‘good’ one.

“We think that the global equity rally that began in 2009 will continue, supported by the ongoing economic recovery, favourable valuations and low interest rates. It is perhaps significant and indicative of the strong positive trend that global equities have only fallen slightly in response to the earthquake in Japan, the unrest in Libya and the broader region, the resignation of the Portuguese Prime Minister and Portugal’s request for an EU bailout ,” said Millard.

“While the risks to the outlook have increased over the last two months, we think that the underlying drivers of ongoing economic growth, modest valuations and low interest rates in the developed world remain in place. We have further increased our exposure to emerging markets amid signs that inflation may be close to peaking in some emerging economies,” said Millard.

This press release is for journalists only and should not be relied upon by financial advisers or customers.