NEWS
Fidelity highlights major themes shaping global investments
18 January 2013
Category:
News, Asia, Global, Europe
By Asia Asset Management
Fidelity Worldwide Investment has released the findings of its third “Analyst Survey”, which highlights some of the long-term themes that are expected to shape the global economy and investment markets in the years ahead.
The report explores the themes identified by more than 100 of Fidelity’s fixed income and equity research and fund management professionals across Europe and Asia. As such it provides a rare insight into Fidelity’s fundamental investment process. It is designed to shine a light on some of the companies, sectors, regions and secular themes that Fidelity analysts believe offer the most promising investment opportunities against a backdrop of debt reduction and consequently weak global economic growth.
The report identifies the following long-term investment themes:
-
An extended “Age of Deleveraging”
-
A continued lack of correlation between investment performance and GDP growth
-
Innovation in technology & energy, facilitating a developed market response to rapid emerging market growth
-
A continuing search for income
-
An ongoing place in investors’ portfolios for China
-
More generally, consumption will drive global economic growth
Sabita Prakash, Head of Asian Fixed Income, Fidelity Worldwide Investment says: “As Asia's bond markets continue to develop, more opportunities are becoming available. Investors who seek margins of relative safety should consider higher quality investment grade corporate debt, given reasonable yield levels and the predictability that stems from good credit quality. This is an especially important consideration when investing in burgeoning markets, such as Dim Sum (offshore RMB) bonds, where investors would be well-advised to seek better structural protection as market standards are still developing. For investors with a higher risk appetite, Asian high yield bonds still offer attractive levels of regular income, however the asset class is subject to higher volatility based on the market’s risk-on risk-off tendencies. Nevertheless, periods of higher volatility generally prove to be attractive entry opportunities into high yield for more seasoned investors. Our fundamental research process is aimed at identifying the best opportunities across the risk/return spectrum.”
Commenting on the findings of Fidelity’s latest Analyst Survey, Leon Tucker, Head of Equity Research, Asia Pacific, Fidelity Worldwide Investment says: “Since the start of the global financial crisis in 2008, economic and market cycles have become shorter, volatility has increased dramatically, and correlations between asset class have shot up. This background makes life challenging for the bottom-up stock picker. One of the best strategies in this environment is to try to identify stocks that are likely long-term winners, stocks that can weather short-term adverse volatility and provide superior long-term investment returns for our clients. Our edge in fielding one of the largest research teams in Asia (over 40 analysts) gives us the ability to develop long-term relationships with key company managements. These relationships allow us to develop confidence in strategic initiatives and updates on execution progress in our portfolio holdings. We firmly believe that challenge drives opportunity, and that our fundamental research process is geared to finding those stocks and investment themes that will likely provide superior long-term returns.”
More News >
Discuss: Fidelity highlights major themes shaping global investments