Portfolio Builder
… and you thought this was cheap
Fund managers are still fairly negative in their outlook
for most investment markets right now, although there
are signs that some asset classes are showing signs of
attractive valuations.
The consensus is that equity markets may be cheap
although they could still get cheaper. When they will
bottom out is nigh on impossible to predict, although many
portfolio managers are looking at their cash weightings to
ready themselves for an entry back into developed equity
markets, possibly via investment grade bonds first.
Emerging markets may struggle in the first leg of
any global stock market rebound as fund flows initially
concentrate on the developed world. But the longer-term
view is that they have the more compelling attractions.
� Asset allocators such as the BDO Stoy Hayward
team have a relatively low equity and relatively
high fund of hedge fund holding, both around 20%
in a balanced portfolio.
� For a less risk-averse client, the weighting of both
is likely to increase, with the equity holding moving
towards emerging markets.
� The fund managers involved in our Manager Sentiment
Survey, are positive about only one area – US equities.
� Even domestic equity and corporate bond outlooks
are neutral at best.
DECEMBER 2008 [www.portfolio-adviser.com] PORTFOLIO ADVISER
In this section…
Manager sentiment survey
MARKET OUTLOOK 30-31
“A look at the equity indices
shows the extent of the
economic turmoil the global
economy finds itself in”
A look across the main sectors
shows that little has changed
as far as the 25 fund managers
polled are concerned
Fund selector
ASIA PACIFIC EX JAPAN
EQUITIES 34-36
“Given that investment in the
region is fraught with danger
at even the best of times, our
preference is always to invest
the bulk of our allocation with
experienced managers” Collins
Stewart Asset Management’s
Justin Oliver explains that
investing in Asia Pacific is fraught
with danger right now and that
manager experience cannot be
underestimated
Asset allocator
BDO STOY HAYWARD
INVESTMENT MGT 32-33
“We will see a bear market
rally perhaps into the New Year
and thereafter equities are
still likely to go down and will
probably test the low level we
had a few weeks ago” Shaun
Port talks through his firm’s asset
allocation process and explains
why valuations may show cheap
buying opportunities but he is far
from being fully invested
27
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