GLOBAL - Pension schemes could generate more alpha by opting for a sector-specific approach to global equities rather than a country focus, said T. Rowe Price.
Although world growth was likely to be moderate, dynamic changes have lead to a wide gulf between companies that win or lose, said Todd Henry, portfolio specialist for the T. Rowe Price global equity strategy.
Structural change are affecting all industries - including those traditionally regarded as domestic stocks - meaning sector based investment was becoming more important than country factors alone for global equity investors, said Rob Gensler, lead portfolio manager for the T. Rowe Price global equity strategy.
”The world is flat in an economic sense, and while the global economy should continue to grow despite the energy shock structural changes are very important to global sectors,” he said. “Where a company is domiciled does not say where their market is. This is not the time for passive investment. As many companies are losing market share as those that are gaining it.”
With both global and local factors influencing investment opportunities, analysis of the life cycle of industries was critical for stock picking, said Gensler.
“Success factors differ according to life cycles of industries. Early stage investing is dependent on innovation and the product while with late-stage investing scale efficiencies and market segmentation is more critical. We won’t buy supermarkets in the US but in emerging markets it is a different story,” he said.
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