Which Asset Classes Are Looking Attractive?

Against a global backdrop of sub-par economic growth, we take a look at the current outlook for the main asset classes

Andy Brunner 13 November, 2012 | 6:00AM
Facebook Twitter LinkedIn

Economic data in October revealed improvements in the US, UK and China but a surprisingly large downturn in Japan. Read more here.

Against this backdrop, investment strategist Andy Brunner outlines Morningstar OBSR's latest asset allocation views below.

Equities
The global economy appears to have subsided into a period of sub-par growth with little prospect of a return to above trend even over the medium term. Equity risks remain high and near term worries over the “fiscal cliff” will likely increase volatility. Even so, economic and financial trends are resulting in coordinated policy responses from governments and central banks that should gradually encourage investors to rebuild equity weights in portfolios and, therefore, we retain a slight long term overweight position. Tactically, we remain overweight the EU, UK and Emerging Markets. The suggested strategy for long-term investment in a low growth/low inflation world, where earnings growth will be at a premium, is to buy exposure to growth markets irrespective of sector, focusing on quality companies with healthy balance sheets and strong cash flow. Income will also be sought in a low interest rate world and higher yielding stocks with rising dividends also remain preferred.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

About Author

Andy Brunner

Andy Brunner  is Head of Investment Strategy, Morningstar UK

Audience Confirmation


By clicking 'accept' I acknowledge that this website uses cookies and other technologies to tailor my experience and understand how I and other visitors use our site. See 'Cookie Consent' for more detail.

  • Other Morningstar Websites
© Copyright 2021 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies       Modern Slavery Statement