At GAM Investments’ latest Equities Meeting, held on 30 March, three of our managers shared their views on investor sentiment across developed markets.
Niall Gallagher – European Equities
Markets have become more defensive in recent weeks and a disappointing vaccine rollout across Europe has not helped the mood. Low volatility stocks have performed well, reflecting caution and underlying factor tensions. Broadly speaking, we remain constructive. From a macro perspective, we expect a solid GDP rebound in Europe this year and a particularly strong recovery in the US. We see interesting areas of potential value across European equity markets, including select energy names and banks.
Chris Morrison – UK Equities
Sentiment towards the UK has improved following clarity on Brexit and impressive progress on the vaccine rollout. This is evident in the firmer pound, good progress from cyclical parts of the market and also from companies that derive the majority of revenue and profits from the UK. Small and mid-caps stocks - traditionally more domestically focused - are enjoying improved trading, with corporate activity providing additional momentum. Encouragingly, dividends are returning.
Mark Hawtin – Technology Equities
Companies with high volatility characteristics performed poorly in March, which reflects the de-risking underway across equity markets. More broadly, cyclical names that will benefit from economies reopening performed strongly in the first quarter, rewarding investors who added to such areas in the latter stages of 2020. Mega-cap names, for the most part, have continued to underperform. We continue to see the most significant opportunities across healthcare, transportation and industrials, boosted by 5G, AI and the Internet of Things or, as we describe it, ‘Digital 4.0’, the fourth generation digital revolution.
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.