2017 has been interesting for a whole host of reasons. Not only have we seen the global economy deliver a sustained expansion but central banks have also started to gradually withdraw the extraordinary monetary policy that has helped to support asset prices over the past decade. However, over recent months we have begun to see equity markets run out of steam, with some indices now largely tracking sideways.
Despite heightened geopolitical risk, questionable political decision-making and monetary policy uncertainty, markets have been remarkably stable so far in 2017. At Canada Life Investments, our quarterly asset mix meetings – which bring together all of our investment professionals – provide us with the opportunity to set out our expectations for asset prices for the quarter ahead.
The impact that Brexit will have on asset prices remains unknown. At present, it appears that neither the credit nor the equity market are concerned, with regard to financials. Global economic growth remains robust and we forecast a relatively benign operating environment for companies in the UK and the Eurozone. But where are we finding attractive opportunities within the financials space?