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Weekly Manager Views: Equities

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22 January 2021

At GAM Investments’ latest Equities Meeting, held on 19 January, three of our managers discussed valuations across their respective markets.

Rob Mumford – China Equities

A liquidity-driven rally is not ideal for investors seeking quality companies at attractive valuations. That said, we see select opportunities in China and favour companies with a competitive edge, solid business models and sustainable credit profiles. We are positive on sustainable high growth businesses (technology at the right price, select internet platforms), renewable growth (electric vehicle supply chains, wind, solar) and recovery with a cyclical bias (travel, casinos). Key risks include ongoing US sanctions, targeted domestic policy reform and most importantly how markets navigate the impact of monetary and fiscal policy tightening this year.

Davide Marchesin - Non-Directional Equity

Equity market valuations appear high and stretched, particularly in the US. On the other hand, when factoring in long-term interest rates and current consensus earnings estimates, it could be argued that these valuations are justified. We see two key risks – negative earnings revisions and a continued rise in US interest rates. Tech stocks and consumer discretionary companies are currently trading at high multiples and could be particularly vulnerable if either scenario occurs.

Mark Hawtin – Technology Equities

We see a broad spectrum of valuations within the growth universe at present. This contrasts with previous cycles, such as the dot.com bubble, where everything was either overvalued or undervalued. At present, valuations in the IPO market and among work from home names look increasingly stretched; at the same time, portions of the market appear attractive. We see significant value and opportunity in next wave disruptive themes, such as 5G, the Internet of Things, and the automation of knowledge work, healthcare, industrials, transportation and fintech.


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. Past performance is no indicator of current or future trends. The mentioned financial instruments are provided for illustrative purposes only and shall not be considered as a direct offering, investment recommendation or investment advice. Reference to a security is not a recommendation to buy or sell that security. The securities listed were selected from the universe of securities covered by the portfolio managers to assist the reader in better understanding the themes presented. The securities included are not necessarily held by any portfolio or represent any recommendations by the portfolio managers.