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GAM Talks Q4 2019: Why should investors consider your asset class?

24 October 2019

We asked a group of our portfolio managers a series of questions about their respective asset classes. This first video, in a series of three, looks at the reasons for investing in their asset classes.

Q1: Why should investors consider your asset class?

Niall Gallagher on European Equities

In the short term, we have had a fair amount of mixed economic news. We believe that the negative news is more concentrated on Germany and industrial production, whereas elsewhere in Europe it has been more positive. It is our opinion that this will eventually lead to a period of stronger economic news. The asset class is also cheap when compared to US equities or fixed income; we feel this is a good time to gain exposure while sentiment is poor. We have seen enormous outflows in the asset class in both the US and Europe. Overall, we feel that European equities are well positioned in the medium-term for the trends that interest us, and we also believe there is a large amount of emerging market growth embedded in European equities.

Anthony Lawler on alternative risk premia

We feel that markets have been challenging for active investors since 2010. This is partly because central bank policy has driven asset pricing rather than fundamentals, creating a difficult environment for active investors. In alternative risk premia, we look at other signals with the goal of capturing returns that are not dependent on fundamentals. In today’s world, we are arguably still in a place where central banks are controlling the price of assets through quantitative easing and low interest rates.

Rob Mumford on Chinese and Asian equities

The theme for both China and Asia is very much premium growth, the improving quality of growth and attractive valuations. We became more positive towards the end of last year as the Federal Reserve became more dovish. Over the course of this year we have seen that position grow even more dovish as growth becomes more challenged externally, making China a more attractive market. Emerging new economies, urbanisation and turning savings into investment are strong structural themes that underpin growth in emerging markets. We believe that, despite the challenges at the moment, it is an attractive asset class that people should be exposed to.

Adrian Owens on global rates

In the longer term, we believe that the returns from the asset class have been very encouraging. Particularly with risk assets looking expensive and yields being very compressed, we feel that the asset class provides many opportunities to investors. We have gone through an environment characterised by significant quantitative easing and liquidity, which has resulted in many distortions. Consequently, the opportunity set at the moment is particularly attractive.

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.