Funds Management

It’s not just FOMO. Truly innovative business models are helping push stocks higher, says Capital Group, and for some of them there’s a lot more growth to come.

While Japanese equities are back en vogue for the institutional investor set, not everybody is convinced, even as multinationals descend on the country and domestic corporates lift their governance game.

In the first half of 2022 the market fell almost as much as it did when Europe tumbled into World War Two. Then it reversed course – and famed bubble spotter Jeremy Grantham says a new artificial intelligence bubble is the cause.

War and plague have disrupted the geopolitical peace over the last three years with far-reaching consequences for international trade and economic growth.

Super funds should start looking in their own region for private debt investments, according to Muzinich and Co., but the lower-middle market in the US also presents a “once in a decade” opportunity.

The EM story of economic growth and portfolio diversification should work in theory – but what’s worked in practice has been altogether different. Still, gloom around China obscures the many bright spots in a diverse market.

Betting on mega-caps has rarely paid off for active managers, but investors who want exposure to the US market are often forced to take on massive stock specific risk for or against the Magnificent Seven. A mega-cap mean-reversion could be a tailwind once again.

The peak in interest rates and inflation has been supportive of markets, but there’s still plenty of turbulence ahead and investors should be wary of chasing stocks higher.

Rising interest rates and elevated stock multiples have brought down the equity risk premium and created a highly advantageous environment for value investors, according to Pzena Investment Management.

Hedge funds struggled again in 2023 as aggregate mediocre performance coincided with net outflows, a new report reveals, while most remain well below the global equity index over the last five years.

Even the biggest fund managers have to change with the times, and the US$750 billion Fidelity is staring down a world that’s moving beyond the traditional investment landscape in which its business was built.

It’s a narrow path to a Goldilocks financial environment with steep drops on either side. Should markets tumble off the edge, big investors could cast their eyes back over macro hedge funds, long-short strategies and gold.