In the first quarter of 2017, many of the asset classes directly affected by the election of President Trump recovered. Emerging market assets rebounded, government bond yields stopped their upward trend and the US dollar depreciated against most currencies. Overall, it was another strong quarter for growth assets.
In this edition, our strategist Michael Power asks whether Western-style democracy is too expensive a luxury for capitalism and Portfolio Manager Greg Kuhnert outlines why now is the time for an all-China approach to investing in Chinese equities.
We retain a constructive outlook for Growth assets as economic data continues to exceed expectations. Euro-zone and emerging market growth are improving and converging with the US. We continue to monitor a series of risks, concentrated in the political arenas of Europe, the US and China.
We have been seeing renewed interest in the emerging market debt asset class since the beginning of 2017. Our Strategy Focus this issue discusses the attractive characteristics of our Emerging Markets Blended Debt Strategy. The broad, blended universe offers opportunity for both return enhancement and risk reduction within this improving and growing area of the market.
Our strategist Michael Power paid a visit to South East Asia in April and met with investors to share his latest presentation. In Singapore, Michael gave a presentation on the rise of populism. Michael believes that the unexpected result of the Brexit Referendum – the majority of British voters elected to say “Stop the world, we want to get off” even though the British political elite across the left-to-right spectrum urged them to stay aboard the European Union – has crystallised a series of underlying social and political trends in the West which have been coalescing for a number of years. As a consequence, investors can no longer ignore the fact that globalisation is creating profound – and negative – pressures in the Western World. These pressures were echoed in the biggest political event of the year; the 2016 the US Presidential Election on November 8th.
I hope you find this issue both interesting and useful and please do not hesitate to contact us if you would like more information.
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