Global Investment View Q1 2018

15 March 2019

Investec Wealth & Investment experts Paul Deuchar and Alexandra Nortier give their insights into the key findings of the Global Investment View for Q1 2018. In this video series, they discuss the global outlook, what's in store for the South African economy and what icebergs to look out for as an investor in 2018.

The Investec Global Investment Strategy Group (GISG) has moved its positioning from neutral to slightly underweight, reducing its appetite to risk to slightly below what they consider par.
 
The GISG has done this despite their central case expectation that over the forecast period (18 months), owning so-called risk assets (for example equities, commodities and emerging market assets) will be rewarded relative to owning cash or fixed income, and also an acknowledged possibility of a "blue sky" positive scenario for risk assets.

What's in store for investors over the next 18 months?

Global Investment View Q1 2018

The Global Investment Strategy Group brings together the insights of Investec Wealth & Investment's professionals in the UK, South Africa, Ireland and Switzerland, mapping their outlook, setting a risk budget and identifying potential pitfalls that lie in the global investor's path.

Global investment icebergs to look out for in 2018

 

Our experts share their insights on investing in turbulent times and a study that looks at what would've happened if you invested at the peak of the last five major market crashes.

 

Outlook for the South African economy

 

What's in store for South Africa after the ANC elective conference?

What's in store for South Africa after the ANC elective conference?

 

Global investment outlook

 

Find out why the GISG has gone slightly defensive despite synchronised global growth.

 

Rationale - why underweight?

 
The GISG's view is that both the magnitude of expected returns on risk assets and the certainty of those returns being delivered is falling.
 
Tactically, a material correction in share markets is overdue in the opinion of the GISG, mainly because of the risks inherent in the withdrawal of monetary stimulus ("transition risk"). This is particularly the case if inflation data forces the pace.
 
WATCH VIDEO: GISG Chairman's views on transition risk.
 
This aligns with an awareness that, taking a medium-term view, the GISG must begin the process of becoming more defensive while market conditions are still strong and well ahead of a potential economic peak (in 2019?), which markets may anticipate in 2018.
"Despite these concerns, we retain a sanguine view on equality valuation in the context of synchronising global economic growth and strong profit momentum," says the GISG report.

"We have therefore chosen to make only a small adjustment at this stage which could be reversed if the long-awaited correction arrives sooner rather than later."
Paul Deuchar
"What history teaches us is that the mistake that most clients make in the event of a crash, is that they tend to panic and exit the market at the worst time."

Paul Deuchar, Head of Portfolio Management, Investec Wealth & Investment

Alexandra Nortier
"It is incumbent on us as wealth managers to try and manage clients' emotions throughout the cycles and keep them invested over time."

Alexandra Nortier, Joint Head of Wealth Management, Investec Wealth & Investment

Read the Global Investment View for Q1 2018

What's on the investment horizon for South Africa and the global economy?

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