09 Aug 2017 - Estimated reading time: 20 minutes
Welcome to our summer edition of Investment Perspectives
In the introduction to last quarter’s Investment Perspectives I began with a reference to living in uncertain political times – with the inconclusive outcome to the May election that view has not exactly changed when considered from a UK standpoint. However, Continental Europe may feel a little more at ease with the political outlook following the French election results.
Despite ongoing political concerns, “risk” markets have continued a relatively robust upward trend; modest underlying growth has allowed the US to continue its path back to normalisation of interest rates, with another 25 bps rise in June. However, there is still a long, long way to go, and we can expect a more pedestrian approach in both the UK and Europe.
In the first article, Graeme Johnston provides his quarterly commentary on markets together with an overview of the economic landscape.
In the second article, Adam Porter looks at the outlook for equities in more detail. Market volatility remains low and earnings growth strong; Q2 was another positive quarter, but can this continue? With what is probably the most widely diverging set of views being articulated by economists and asset managers, the challenge for equity investors right now is whether to be more bullish or remain cautious.
Aligned to the debate on equities, Allison Galbraith then takes a look at the impact of unwinding of quantitative easing. With the potential for this to be the beginning of the end of ultra-low rates, Allison considers what the end of QE might mean for pension funds.
In the final piece, Matt Buchanan provides an update on the FCA’s publishing its final findings on the Asset Management Market Study.