UK - Fund managers will be under pressure to perform in 2005 as slowing global growth looks set to result in modest excess returns over bonds, says F Asset Management.
Speaking at a briefing in London, Tony Broccardo, chief investment officer at F Asset Management predicted low equity market volatility would remain a key theme in 2005 and equities to outperform bonds and break out of their current trading range
“In such an environment, the focus will be for fund managers to generate additional returns through their ability to pick the right individual stocks,” he said.
“In short, fund managers are going to have to work for their supper.”
Broccardo said the outlook was bright for Continental Europe and emerging markets in the coming year.
“In the UK peaking interest rates should underpin gilts but equities continue to offer better value,” he said.
“That said, we believe the most attractive returns from equities will come from Continental Europe and emerging markets rather than the Anglo-Saxon markets.
“Of all asset classes we anticipate emerging markets to perform best – an increase in domestic growth and demographics means we’ll see a lesser reliance from the region on global trends. Commodity prices will continue to rise, a significant factor given emerging markets account for two thirds of the world’s natural resources.
“Increases in FDI and improved corporate governance levels, together with decreased debt levels and diminishing trade barriers all mean the wealth gap between some of these economies and more developed markets will continue to close.”
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