Imagine a day when "Asia ex-China" portfolios are the norm. We think this is not too far-fetched an idea.
“Even though Mester is often perceived as a hawk, she is quite centrist in the current environment.”
John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com
With the Nikkei Index breaching the 24,000 mark, its highest level in 26 years, Japan appears to have put its “lost decade” of growth well behind it.
Over the past few years, one of the main risks that concerned our team was the possibility that asset classes could become positively correlated.
A flying visit into China post the 19th Party Congress seemed like a good idea. I got the sense that post the conference, visibility and direction over the next five years was reasonably clear. But it is more difficult to hold a similar view for 2018.
Our Senior Portfolio Manager for Emerging Markets in London forecasts that in 2018, this asset class could well match 2017’s achievement.
For 2018 and beyond, we see a story of central bank policy normalization and foresee the global economy growing in a similar fashion to how it did in 2017: low growth coupled with comparatively low inflation data.
We see the key investment themes to drive performance in Global Credit in 2018 to be similar to last year. We have developed our investment themes: Long US High Yield, Long Chinese Tier1 SOEs, Long European Hybrids, Long European Financials, Long Rising Stars.
China has not yet been fully incorporated into indices, creating a mismatch and a unique challenge to investors in navigating this new world order.
Despite geopolitical risks and central banks that will be less dovish than the market expects, the Global Investment Committee forecasts that the G-3 economies will grow faster than consensus and that global equity markets will remain very bullish in the intermediate term.