Challenges Facing ISA Investors

The big new trends in the past 6 months are a stronger dollar and much weaker oil prices. These affect different sectors and countries differently

J.P. Morgan Asset Management 10 March, 2015 | 7:45AM
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Morningstar's "Perspectives" series features investment insights from selected third-party contributors. Here, as part of Morningstar’s Guide to Financial Planning, J.P. Morgan Asset Management Chief Strategist for Europe Stephanie Flanders discusses four themes and three rules that matter most for ISA season.

Probably the biggest issue for global markets in 2015 is whether and when the US central bank will finally raise interest rates. With cheaper oil prices pushing down the headline US inflation rate, many in the markets think that long expected rate rise will happen later than previously expected. But the people making the decision in the Federal Reserve have always said they will base it on all of the available data – and most of the data coming out of the US economy today points in the direction of higher rates, especially the strength of the labour market.

On the other side of the Atlantic, the European central bank has made equally clear that it is going to loosen policy through large-scale purchases of sovereign bonds – quantitative easing. The message for investors? Interest rates are heading in different directions in the US and the Eurozone in 2015, even though inflation everywhere has been heading down.

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J.P. Morgan Asset Management  is the investment arm of JPMorgan Chase & Co. and it is one of the largest active asset managers in the world.