Schroders: beleggers moeten zich voorbereiden op een 2015

Schroders: beleggers moeten zich voorbereiden op een 2015 met lage groei: kapitaalbehoud is het
adagium
2014 eindigt met karige rendementen in bijna elke beleggingscategorie. De komende jaren worden
naar verwachting gekenmerkt door lagere rendementen en een hogere volatiliteit. In de toekomst
gaan zich nog voldoende aantrekkelijke beleggingskansen voordoen. Maar op dit moment doen
beleggers er goed aan vooral te focussen op kapitaalbehoud en zich voor te bereiden op lagere
rendementen. Dat stellen Marcus Brookes, hoofd multi-manager, en Robin McDonald,
fondsbeheerder bij Schroders, in hun Outlook 2015: Multi-manager.
Johanna Kyrklund, hoofd multi-asset bij Schroders, wil vooral focussen op activa die een periode van
karige groei weten te weerstaan. In haar Outlook 2015: Muti-asset investments stelt zij voor
kredietgerelateerde activaklassen te mijden.
De beleggers zijn optimistisch gestemd over de VS en het VK, geven Japan en Azië het voordeel van
de twijfel, maar hebben Europa afgeschreven. Maar volgens Schroders kan Europa ook beter
presteren dan verwacht.
Voor obligaties zijn volgens Schroders de veiligheidsmarges flinterdun. De rendementen zijn laag, de
spreads verkrappen en de correlaties nemen toe. De obligaties doen het niet goed in een periode van
stijgende rente. In tegenstelling tot Schroders lijken de beleggers vooralsnog tevreden met het
risicogewogen rendement.
Aandelen zien er iets beter uit, maar zijn duur vergeleken met hun lange termijn gemiddelde. Dat
geeft een indicatie hoe gevoelig ze kunnen zijn voor teleurstelling. Ook hier lijken de beleggers
optimistischer dan Schroders over het risicogewogen rendement.
In 2015 kunnen zich mooie kansen voordoen in de grondstoffen, gezien de correctie die deze
markten al ondergaan hebben. Staatsobligaties blijven kwetsbaar voor Amerikaanse
werkgelegenheidscijfers. Het risico schuilt meer in deflatie, dan in inflatie. Met een zwak
groeimomentum is de druk op de Fed niet groot om de rente te verhogen. Britse staatsobligaties
kunnen als hedge dienen voor een zwakke groei, omdat ze meer rendement bieden dan Duitse
Bunds.
Outlook 2015: Multi-asset investments
1
Johanna Kyrklund, Head of Multi-Asset Investments
24 Nov 2014
In recent years we have danced to the central bankers' tune. With rates pinned at 0%
we correctly judged that the path of least resistance, for developed equities in
particular, was up. As we move into 2015, however, it might be time to sit some of the
dances out.
Seeking assets that can withstand low growth
The desynchronised nature of the global economic recovery is to some extent good news: firstly, potential inflationary pressures in
the US are being suppressed by economic weakness elsewhere; secondly, a strengthening US dollar is allowing other economies to
‘borrow’ some of America's dynamism.
The challenge is that in the absence of a more vigorous global economic recovery, it is difficult to rotate into the cheaper assets which
tend to be more cyclical. This is why we remain stuck in a loop, endlessly chasing yield and pushing already expensive assets to
even loftier levels.
Against this backdrop, we are shifting gears. Where previously we had emphasised ‘making hay while the sun shines’, we are now
focused on avoiding potholes. Rather than relying on knee-jerk responses to central bank announcements, we prefer to focus on
assets which can cope with anaemic economic growth. This leads to us to avoid credit-related asset classes due to expensive
valuations and potential illiquidity. Yes, yields could keep on grinding lower but it feels increasingly speculative at this point.
Supportive earnings trends in some equity markets
Within equities, we expect performance to remain narrow and we are emphasising markets and sectors where corporate earnings
trends are most well-established. To entice us into more cyclical areas we need to see deep discounts. The US, which is very much
leading the recovery, continues to be one of our favoured markets. Ample liquidity along with earnings potential and growth
momentum support our positive view.
We also take a positive view on Japan. Abenomics has led to a substantial depreciation in the yen while the increasing focus on
corporate governance combined with a shift of asset allocation by the national pension fund towards domestic equities has provided a
further boost to equities. Even though longer term the prospects for the domestic economy remain bleak, these policies are positive
for many asset markets.
European growth continues to disappoint and even Germany is now suffering as emerging market weakness undermines its export
markets. A significantly weaker euro is required to help mend the eurozone which will need greater decisiveness from the European
Central Bank. Emerging markets remain stuck between disappointing growth in core exports markets in Europe and Asia and
tightening US dollar liquidity.
Commodity correction may lead to opportunities
As we expected, commodities have struggled this year. While the cyclical backdrop is not supportive, we may find opportunities in
2015 given the correction we have seen already. Energy prices have fallen a long way and are now trading around the marginal cost
of production but Saudi Arabia appears to be tolerating prices at this level as it enables them to gain market share. Metals prices
have also suffered but should continue to receive some support from Chinese policy makers who maintain an easing bias.
Bonds to be buffeted by data noise
Government bonds remain vulnerable to oscillations in US labour market statistics but ultimately we believe that risks remain skewed
towards deflation rather than inflation. Global growth momentum (with the exception of the US) is weak. Given this backdrop, we
believe that Janet Yellen, chair of the Federal Reserve, is not under any immediate pressure to raise rates. In this environment UK
government bonds provide a hedge against a further slowdown in growth momentum since gilts benefit from safe-haven flows if the
economic environment in Europe deteriorates while they offer a more attractive yield than German bunds.
Related articles earnings bonds commodities Outlooks 2015 Johanna Kyrklund Multi-asset
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Outlook 2015: Multi-Manager
1
Marcus Brookes, Head of Multi-Manager
Robin McDonald, Fund Manager
20 Nov 2014
Investors need to prepare for lower returns in the next few years, with a focus on
capital preservation appearing prudent in the current environment.
We end 2014 with almost every asset class offering investors scant potential return for their
risk. Five years into a period of unprecedented interest rate suppression, this should come as no surprise. The returns generated
from every mainstream asset since 2009 have been striking. Those returns are now in the past. We believe the next few years will be
characterised by lower returns, more volatility and greater risk.
The backdrop
We're going to cop out here and leave politics to one side for the purposes of this outlook. The economic backdrop is foggy enough!
Suffice to say we will comment throughout the year on this particular risk factor.
To try and summarise consensus expectations for growth in 2015, we would say that investors are very optimistic about the US (yet
still don’t believe the Federal Reserve (Fed) will raise rates) and to a lesser extent the UK, are willing to give Japan and much of Asia
the benefit of the doubt for now (but are sceptical of China), and hate Europe full-stop.
Starting as we often do at the bottom, for our sins, we think the combination of an expanding European Central Bank balance sheet,
a gradual pick-up in credit growth due to record low funding costs for corporates and consumers, and the disposable income boost
from lower oil prices has the potential to confound very low expectations for Europe next year.
Momentum in the US looks sustainable at least into 2015, meaning the Fed should follow through and begin raising rates. We’ll defer
to our 2016 outlook for a judgment of how the economy absorbs what will likely be baby steps towards a tighter policy backdrop.
If US rate hikes don’t occur next year, the likely scapegoat will be a deflationary impulse emanating from China – the elephant that
never leaves the room. The risks to China and other emerging markets will correlate highly with the strength of the US dollar in our
view. Dollar bulls need to be careful what they wish for. A strong US currency, all else being equal, is not bullish for emerging market
liquidity.
Not banking on bonds
Almost irrespective of one’s economic outlook, the margin of safety in fixed income markets is wafer thin. Aggregate yields globally
are as low as they have ever been. Spreads are also closing in on their all-time tights. As a result, correlations within fixed income
have picked up worryingly. Traditionally fixed income does not do well in a rising rate environment. If US rates do rise in 2015 as the
Fed is telling us they are likely to, every fixed income asset class will take a hit. In spite of this, judging by the scale of continued
inflows, the majority of investors appear comfortable with the risk/reward set-up. We’re not, and therefore have only limited exposure.
By definition, prospective returns today are pretty much as low as they have ever been, risks are high and liquidity is terrible.
Investors need to tread carefully here.
We have a healthy cash balance across our portfolios at present, with some diversification into US dollars. Cash is currently
considered an inferior asset as it generates a zero return. We believe it will become more desirable as the market sets about
discounting higher US interest rates.
Expensive equities
Assuming global aggregate demand can continue to expand in 2015, we would have sympathy with the view that equities offer a
greater short-term prospective return than fixed income. Nevertheless, we judge equity valuations from a longer-term perspective,
particularly in the US, to be on the expensive side at present. This tells you next to nothing about their potential for 2015, but does
indicate their vulnerability to disappointment. Like fixed income, from a positioning standpoint, investors appear very comfortable with
the risk/reward trade-off in US equities. Once again, we’re less sanguine. What equity risk we are taking is predominantly outside of
the US, favouring Europe and Japan particularly. Both markets have relative value on their side and the potential for a catch-up in
profitability. In contrast, US equities trade at historically high multiples of historically high earnings. The emerging market complex
also strikes us as vulnerable to disappointment and we have next to no exposure there.
Fertile ground for alternatives
Fortunately, we believe the environment is becoming ever more fertile for short-selling, allowing us to generate uncorrelated returns in
what may otherwise prove a difficult backdrop for investors. This opportunity set extends beyond equities, to bonds and foreign
exchange markets also. The faith investors have placed in the Fed this cycle has made shorting a largely unprofitable exercise. We
expect this to change.
Raging bull market enters new phase
The bull market that began in March 2009 has been one of the most rewarding in history, yet the economic recovery to date has been
one of the weakest. With the US economy now on a firmer footing, the Fed should intervene less in asset markets in 2015.
Not for the first time we have been premature in moving to emphasise capital preservation within the portfolios (will we ever learn?!)
while this new investment environment unfolds. However, such is the unbalanced set-up within markets in our view, when (not if)
investors decide to become temporarily more risk-averse, the likely re-pricing will be swift.
We remain very optimistic about future investment opportunities, just not present ones. For the time being we consider capital
preservation the most prudent strategy for the portfolios. This will change as the opportunity set evolves.
Related articles Federal Reserve dollar Outlooks 2015 Marcus Brookes Robin McDonald Global Equities Alternatives
Fixed income
Issued by Schroder Investment Management Limited, 31 Gresham Street, London EC2V 7QA. Registered No: 1893220 England.
Authorised and regulated by the Financial Conduct Authority
For more information on Schroders' products and services visit Schroders' global website.
© Copyright 2014 Schroders plc
Important information
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