In order to enable us to review the performance of various asset classes in our global universe of investment opportunities, over the past quarter, as well as over the medium to long term, in the context of our investment strategy, we outline our high level portfolio positioning, in terms of our levels of conviction towards different investment opportunities.
Our high conviction investment ideas are:
- Africa listed property markets
- Emerging listed property markets
- China Equity markets
- Emerging equity markets
- Africa equity markets
- European equity markets
Our neutral conviction investment ideas are:
- Developed equity markets
- Developed property markets
- Local equity markets
- Local listed property markets
Our lowest conviction investment ideas are:
- Local fixed interest
- Offshore fixed intrest
Against this framework, we also note that the three main factors that continue to dominate investment strategy, and thus market performance are: policy/liquidity settings, the global economic growth trajectory and fundamental asset class valuations. Of these we believe that, the main driver of performance over the past quarter was the policy / liquidity factor. In particular, we believe that the theme of “lower interest rates for longer” , has been strengthened across the markets, over the past few months. This has in turn further intensified the search for yield, pushing the valuations of a number of investment opportunities further into expensive territory. The past quarter, in particular saw global capital flows favouring emerging markets, which supported the performance of these markets and went a long way in stabilising their currencies.
Stringfellow – Q2 Investment Report – 2014