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What themes do you expect to play a major role in shaping the investment world in 2016, and which managers or funds are best placed to take advantage of these trends in the coming year? As the market readies itself for the imminent increase in US interest rates, the clamour for yield should soon start to dissipate. Mitigating the impact of unwinding yields will be the first hurdle for investors in the next 12 months. These were the questions that Citywire asked a number of leading European asset allocators, including Aria Capital’s John Lambert, to ponder. The following was John’s response:
” A sustained uptick in volatility, against a backdrop of indecisive equity markets, could be another challenge. Investors will need to be more wary of index-based investments and faith in good stock pickers should be rewarded. That’s not to say that central bank intervention is going away anytime soon. It is likely to play a considerable role in the direction of investment markets into 2016 and beyond.
Europe continues to offer an interesting and somewhat contrarian opportunity for investors. Europe’s ability to restore sustained economic growth is, as yet, unproven; however, the macroeconomic climate and a weakened euro makes for an enticing environment for those corporates positioned to take advantage.
Many investors are cash-heavy at present and the transition into risk assets is not always an easy one, particularly when many asset classes look expensive. However, we have used alternative approaches, typically a blend of uncorrelated low beta strategies, to bridge that gap between security and risk. This theme will remain relevant in 2016.
With the above in mind, funds that are likely to play a role in client portfolios over the next 12 months include: Fidelity FAST Europe – European Equity, managed by Anas Chakra; Fidelity Special Situations, run by Alex Wright; Ruffer Total Return International, managed by Alex Lennard and Jacques Hirsch; Pensato Europa Absolute Return, managed by Graham Clapp; DB Platinum IV Systematic Alpha run by Winton Capital Management; and Schroder UK Absolute Dynamic, managed by Paul Marriage and John Warren. ”
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