Beverly Chandler, Opalesque London: The latest report from Lyxor research finds that there are two key calls for 2013: risky assets will outperform safe havens and hedge funds offer inviting risk-return profiles.
Lyxor claims that the roots of their optimism lies in the realization
of three scenarios. "First, we expect a pickup of world activity,
starting in the first quarter of 2013, led by US and Asia. Second, we anticipate
calming of political risks, following the recent non - US fiscal cliff
- event, and the ongoing success of OMT measures in the
Euro-zone. Lastly, we believe that Central Banks should
maintain ultra-loose monetary policies, as employment troubles
take time to heal."
Lyxor argues that it’s time to prefer equities which remain
historically cheap relative to safe haven bonds. "Last year
already saw the onset of normalization in equity risk premiums.
We believe that risk premiums will ease again in 2013, as
improving economic conditions prompt investors to become
less and less reluctant to buy "risky" equities rather than "safe"
government bonds" the firm writes.
"European equities are well positioned. Indeed, debt fears in
peripheral countries sent domestic valuation metrics on ugly
levels compared to their counterparts. European equities have
room to significantly outperform U.S. equities in 2013.
Moreover, the recent relaxation of Basel III rules should be a
positive trigger for European Bank related......................
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