The experts at global asset manager, Schroders, have prepared several 2019 Outlooks for their specific investment capabilities. They’ve handpicked the most relevant for SA – which you can find below.
Chief Executive’s Outlook 2019: Why 2019 might be a better year for investors
By: By Peter Harrison, Group Chief Executive, Schroders
After the disappointment of 2018, Chief Executive Peter Harrison rounds up the factors our fund managers think could lead to a brighter year ahead.
Outlook 2019: Emerging markets equities
By Tom Wilson, Head of Emerging Market Equities at Schroders
Key potential catalysts for emerging markets performance in 2019 are US dollar weakness, a better-than-expected outcome in US-China trade relations and an easing in Chinese growth concerns.
- Valuations in aggregate are attractive and reflect a cautious growth and earnings outlook, while many currencies look cheap.
- Further escalation in the US-China trade conflict is a risk, but is increasingly priced-in.
- We expect moderate US dollar depreciation in 2019, which should act as a catalyst for emerging markets equities.
Outlook 2019: Global equities
By Alex Tedder, Head and CIO of Global and US Equities and Simon Webber, Lead Portfolio Manager, Schroders
We are seeking out companies investing for change in 2019, while increasingly wary of those that have borrowed excessively.
- In general, markets are moving into a new phase in which inflation is on the rise and central banks are offering less support to markets.
- There is plenty of complacency in equity markets about the risks from higher interest rates and elevated corporate debt.
- We believe that some of the best investment opportunities are to be found where industry disruption is significant, such as in the transition to renewable energy.
Outlook 2019: Sustainability
By Jessica Ground, Global Head of Stewardship – ESG
The next few years will see rising physical losses from climate-related events, higher taxes to combat intergenerational inequality and tougher conditions for over-levered corporates
- With a growing number of extreme weather-related events in the years ahead, certain sectors are at risk of suffering damage to physical assets and rising costs
- Governments are likely to look to corporates to help them tackle the imbalance between generations
- Companies with too much debt are vulnerable to a rising interest rate environment
2019: Global cities outlook
By Tom Walker and Hugo Machin, both are Co-Head of Global Real Estate Securities at Schroders
Global cities look set to benefit from a technological revolution in 2019 as investors place a higher value on knowledge than manufacturing.
- Fundamental shifts in demand will impact how we use land and buildings in global cities.
- The demand shift is already evident in retail, with surging demand for well-located warehouses.
- Locations in strong cities close to great transport links have enduring value and will benefit from the disruption revolution, as people cluster together to monetise new ideas.