Benedicte Gravrand, Opalesque Geneva:
State Street Global Advisors (SSgA), the asset management business of State Street Corporation highlighted in its global outlook for 2014 five key investment themes, around an expected recovery with some remaining risks.
Globally, the U.S., and to a certain extent Europe will continue in their recovery course. Emerging market will be impacted by a stronger global economy and a strengthening dollar. SSgA expects a 7.5% growth for China. Overall one should still be cautious of the sluggish growth and the normalization of monetary policy.
State Street’s investment themes are:
1. Fixed income in transition, due to diverging monetary policies, the U.S. tapering, and rising rates.
2. Eurozone recovery: expected rallies in peripheral stocks, and UK should be the best G10 performer despite inflationary pressures.
3. Emerging markets: bond and equities offer good upside for 2014, but investors may have to be selective.
4. Overvalued safe havens: government bonds seem to have lost their safe haven appeal, and this extends into other fixed income segments and cash.
5. The changing face of correlations: challenges in 2014 will make it difficult to build well diversified portfolios, so tactical asset allocation may work best. SSgA ......................
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