Asset Classes
Risk still has its attractions
The number of risk-averse investors is growing daily,
and is set to grow further given the amount of bad
news still predicted to come from economies globally
as well as the increasing amount of daily corporate
woes that are continually being reported.
Yet for the same reasons there should be greater
opportunities for the more risk aware who are prepared
to back their opinions on those geographies, sectors or
companies that are being sold off indiscriminately when
their fundamentals are strong.
Emerging markets could be one such area of benefit,
from investors looking to steal an early march and
spend some of their high cash allocation. There is
a strong argument for this across the asset classes,
although there is an equally strong argument suggesting
developed markets will lead the way.
� September and October have been universally
recognised as two of the worst-performing months
for property, hedge funds and even corporate bonds.
� The outlook is still uncertain, although the central
banks’ rescue packages have injected some muchneeded
security into economies, if not stock markets.
� The consensus is that we will continue to get a steady
stream of bad corporate news into the early part of 2009.
� The jury is still out on whether it will be developed
market or emerging market that will shine the light at
the end of the tunnel.
DECEMBER 2008 [www.portfolio-adviser.com] PORTFOLIO ADVISER
In this section…
The contrarian
RISK-BASED ASSETS
“I expect risk-based assets to
outperform significantly over the
next two to three years, so I will
be long equities and long highyield
bonds” Courtiers’ Gary
Reynolds points out that there are
some brilliant long-term
opportunities in risk-based asset
classes because of rather than
despite the short-term market chaos
Alternatives
FUNDS OF HEDGE FUNDS
“The universe of Asian
managers is becoming less
directional and increasingly
expert at capturing returns from
a wider range of opportunities”
Funds of hedge funds are dominated
by domestic and developed market
hedge funds when the Asian macro
story has plenty to offer the longterm,
risk-aware investor, writes
Axa’s Chris Manser
42-43
Fixed income
FAR EAST BONDS 44-45
47-48
“As Asia’s economic prospects
improve, there is the potential
for ratings upgrades both at
the country and company
levels that would drive positive
performance in the bonds”
Given that Far East equity funds
have been the beneficiaries of huge
inflows because of their economic
growth, Neal Underwood asks if
investors are shying away from
similar benefits in bonds
41
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