Compared to previous decades, it is fair to say that the developed markets are now in a low growth environment, with GDP growth still struggling to reach pre-crisis highs amidst a collapse in productivity. This backdrop therefore places a premium on higher growth structural trends which, as active investors, we look for and try and take advantage of.
The 9 August 2017 was regarded by many as the 10 year anniversary of the global financial crisis. The European Central Bank (ECB) and the US Federal Reserve (Fed) ploughed c. £45 billion into financial markets that day as the credit crunch began. Astonishingly, the UK base rate on that day stood at 5.75%. Since the 5 March 2009, it has only ever been 0.50% or lower.
With less dovish tones starting to emanate from central banks globally, relatively high valuations across equities and a cooling off in the London property market, it is safe to say that we are not spoilt for choice in terms of attractive opportunities. Following a somewhat volatile second quarter, how are we positioned for Q3?
In 2016, we timed the portfolio shifts of the CF Canlife Global Equity and CF Canlife North American funds very well, rotating our overweights into the more value areas of the market as economic indicators – such as the Citigroup Economic Surprise Index – began to suggest that consensus views were too bearish.