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Alternative Market Briefing

Threadneedle expects continuing equity volatility this year

Wednesday, March 18, 2015

amb
William Davies
Benedicte Gravrand, Opalesque Geneva:

Investors should expect more volatility, which is signaling a "slow moving" top to the market, KKM Financial’s founder and CEO Jeff Kilburg told CNBC on Monday. And this volatility is going to spill into every asset class. Threadneedle seems to share that view and is holding on to predictable stocks as a result.

William Davies, Head of Global Equities at Threadneedle Investments, an active investment manager with $148bn in AuM and the international investment management arm of Ameriprise Financial, recently discussed global equities in an Opalesque Radio interview with Sona Blessing.

Equities don’t look cheap nor do they look expensive, he says, but what’s really important is that discount rates and interest rates are quite low.

"So in as much as equity valuations are a function of future cash flows which are discounted, that makes equity valuations look quite attractive," he continues. "But in an environment where growth rates are lower than in the mid-2000s or even back in the 90s, that should lead back to a discount for equities, because growth won’t be as high. But if we can find companies which are growing steadily, then, to us, they ought to trade at a premium to other types of companies because with ......................

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