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GAM Talks Q4 2019: What themes are you currently playing?

7 November 2019

We asked a group of our portfolio managers a series of questions about their respective asset classes. This third video, in a series of three, looks at the themes the managers are currently exploring.

Q3: What themes are you currently playing? 

Anthony Lawler on alternative risk premia

This year we have seen a return to normality, where attribution in the risk premia space has been broad. We have seen positive attribution year-to-date as of mid-September across the piece. If anything, therefore, the theme is a return to normality in markets.

Niall Gallagher on European equities

One theme is the emergence of the Asian middle class consumer. Over the course of the next decade, we expect to see several hundred million people join the middle class in Asia alone. We can also look at some of the suppliers of semiconductor equipment, who we feel would also benefit. Furthermore, we can see that, within Europe, there are a number of cheap stocks. This has incited a debate of value versus growth, however we disagree with this assessment, as we believe many of the industries behind the stocks in the value category are structurally challenged or impacted by low interest rates. It is our opinion that the true competition lies between cyclicality and low price volatility. We can observe that many of the stocks with low price volatility are fairly stretched in terms of valuation; conversely, cyclical stocks are cheaper, although the businesses are performing well. In addition to this, we focus on long-term structural growth trends, which are derived from things happening outside of Europe.

Adrian Owens on global rates

We feel that there are good opportunities in the Norwegian and Swedish currencies, both of which are very cheap at a time when the central banks are on a tightening bias. Within the interest rate markets, it is our opinion that Mexico is attractive due to its real interest rates and slowing inflation. In addition to that, despite the noise around Brexit, we feel there are very good opportunities in the UK. Some of these opportunities could be in the more conventional bond space, while others are in breakeven markets. Relative to other markets and to history, the spreads can be incredibly attractive. We also see good opportunities in the US on a more relative value basis. 

Rob Mumford on Chinese and Asian equities

We feel we have two twin drivers: cyclical and structural. We are positioned in both camps. For example, there are areas that benefit from lower interest rates, and those that benefits from stronger fiscal policy. We also follow long-term structural themes, such as increasing disposable income or changes in education. We feel these things will continue irrespective of the cyclical pressures.  

Important legal information
The information in this document is given for information purposes only and does not qualify as investment advice. Opinions and assessments contained in this document may change and reflect the point of view of GAM in the current economic environment. No liability shall be accepted for the accuracy and completeness of the information. Reference to a security is not a recommendation to buy or sell that security. Past performance is no indicator for the current or future development.