F&C News in Brief
F&C’s Mahtani: Next decade “will belong to India”
Whilst the strong economic development in China dominated headlines over the last decade, F&C’s Sam Mahtani believes that the next decade will belong to India.
Economic growth in India has been on an upward trend over the past two decades. As such, Mahtani anticipates that growth will continue to accelerate this decade, moving above 9%pa, and that India will likely overtake China to become the fastest growing economy in the world during the next five years......
F&C Japan desk gets vote of confidence from world’s oldest investment trust
Foreign & Colonial Investment Trust (FCIT) has brought management of its Japan portfolio back in-house to F&C Investments, almost five years after outsourcing it to Goldman Sachs Asset Management (GSAM).
At the time of the outsource deal in 2005, F&C’s Japan desk had performed poorly for some time and FCIT manager Jeremy Tigue took the decision to place the portfolio with quantitative manager GSAM. But with the in-house team now ahead of the sector median performance over one, three and five years, Tigue has decided to switch the portfolio back to F&C to take advantage of the greater flexibility offered by an active investment management approach.....
Selective risk/return opportunities remain in High Yield
With a steeper yield curve and expectations of a rapidly improving economic recovery, many strategists are making a case for equities in 2010. However, whilst the return potential of equities can be greater than that of high-yield bonds, the risks can equally be greater.
F&C’s High Yield team is of the view that global GDP growth is likely to remain volatile in 2010, with some experts anticipating the return of shorter, more dramatic business cycles. To prepare for this environment, companies are conserving cash flow and reducing leverage, encouraging tepid growth at best. Slower post-recession growth and lack of earnings visibility, combined with a higher cost of capital, is likely to place pressure on equity valuations and their return potential. Furthermore, the expectation of higher interest rates also supports the case for high yield as the asset class typically performs well amidst rising interest rates, whilst equities have a higher degree of sensitivity in this environment....
Article last updated: Mar 11, 2010
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