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CAMRADATA has published a new whitepaper entitled, Global Growth in Global Equities, which examines the outlook for global equities investments and considers why they continue to be the pillar of investors’ asset allocation and whether this trend will continue.

The whitepaper includes insight from investment managers and pension managers from firms including Artemis, CQS, Mackenzie Investments, Aon, MJ Hudson Allenbridge, Redington and PwC, who attended a recent CAMRADATA Global Equities roundtable.

It highlights that global equities remain the backbone of investment allocation for institutional investors, with over 90% of asset owners invested in global equity strategies, which provide a hunting ground for core holdings across the stock market.

It reports that investors view global equities as being a diversifier or an opportunity to target faster growing regions in order to achieve better returns than they can locally.

Sean Thompson, Managing Director, CAMRADATA said:

“As the global equity markets rallied in the first months of 2019, following the shift in October and December last year, investing in equities in general and specifically global equities has presented opportunities. According to Citywire Discovery data, global equities attracted the most money over the timeframe, which resulted in a €11.10 billion inflow into portfolios of Citywire-tracked managers.”

The big questions for investors now are whether global stocks will continue to provide good opportunities and diversification for investors? What innovation can we expect to see in this sector going forwards, and will there be new considerations and approaches? What effect will the US and China trade tariffs have on the global markets?

The investors at the roundtable considered how some investors are looking at income assets, as well as shifting to passive equities because of cost. Many big investors are now looking far more seriously at lower cost, passive funds like ETFs.

Some pension funds are reducing their equity exposure despite equities having served pension funds well and still needing returns. Equities have helped close deficits, but the next logical step is for those funds to move to match or even buy out liabilities.

The report highlights research from the University of Arizona that only a limited number of constituents drive the stock market. In the USA, 50 stocks have made 40% of the value creation over the last 100 years. Ninety-six per cent of companies destroyed value.

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Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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