Why We Favour UK, Japan and Emerging Market Stocks

Marking the 5 year anniversary of Morningstar Investment Management portfolios, managers tell us where the best opportunities lie

Cyrique Bourbon 3 April, 2018 | 12:29PM Mark Preskett
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What are the key investment themes for 2018 and beyond?

It is critical to remember that asset allocation is the primary driver of long term returns. Morningstar studies estimate that this could account for up to 90% of the variability of our outcomes. Therefore, factors such as the equity/bond split, geographic allocation within equities and duration levels will have a meaningful impact on outcomes.

A key recent move for us has been to add fixed income assets back into the portfolios in the latter parts of 2017, with a particular emphasis on US Treasuries. This is the first time since the launch of the portfolios that we have done so.

In an expensive world, we have been reducing equities across our portfolio range in 2017 and this has stood us in good stead during the tricky first few months of 2018. Within equities, we currently favour UK, Japan and emerging markets.

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About Author

Cyrique Bourbon  is multi-asset portfolio manager for Morningstar Investment Management EMEA