Perspectives Blog

Digging deeper for market valuations

Robert McConnaughey, Director of Global Research | December 1, 2014

…for index composition differences, the valuation disparities seem even less compelling. The table below examines valuations of trailing P/E ratios for the regional constituents within the MSCI All-Country World Index. The more one lines up like-for-like sectors and industries, the closer the valuations appear. Source: Columbia Management Investment Advisers, LLC In only a few areas does there appear to be much disparity. The biggest driver of ag…

U.S. rates — When the facts change

Zach Pandl, Portfolio Manager and Strategist | September 10, 2014

…s the curve—not just at the front end. Yield curves tend to flatten as central banks raise short-term rates, but valuations have now moved beyond the point where these trades make sense. Investors should brace for higher interest rates, not just a flattening yield curve. When the facts change At the start of this year our views on U.S. interest rates were underpinned by two main facts: (1) reasonable valuations for longer-maturity Treasuries aft…

Thoughts on navigating market volatility in today’s technology markets

Rahul Narang, Senior Portfolio Manager | April 28, 2014

…on the hyper growth software (SaaS or Cloud) names as well as the Internet sector and how we are thinking about valuations and trying to find the floor for these stocks. SaaS or Cloud The potential of rising rates, steep valuations and a plethora of “cloud” based IPOs and follow-ons have sent the high-flyers in the space into a tail spin. Stepping back, there are secular shifts underway in software distribution. The percentage of software to be…

Global Asset Allocation Outlook (as of February 24, 2014)

Columbia Management Global Asset Allocation Team, | March 10, 2014

…political risks are elevated in the region. To a large extent, this view is already expressed in the markets and valuations appear attractive. But leading indicators of growth, such as the PMIs have continued to deteriorate putting into question the prospects for near-term improvement in the region. In addition, we raised TIPS (Treasury Inflation-Protected Securities) exposure from underweight to neutral, mainly on attractive valuations. Lack of…

When the QE tide recedes, focus on what is revealed

Robert McConnaughey, Director of Global Research | January 6, 2014

Monetary stimulus from central banks can no longer be counted on to lift asset prices For 2014 we see a market with lower cross-correlations and more divergent investment outcomes Finding alpha opportunities requires in-depth global research to take advantage of market inefficiencies While there is fierce debate on the ultimate effectiveness of monetary stimulus surging from the central banks, one cannot dispute the boost that it has given to…

What to make of the rebound in emerging market equities

Dara White, Senior Portfolio Manager | April 14, 2014

Despite continuing headlines of concern, EM markets have rebounded recently. In order to sustain that rally, we need to see progress on export volumes and political/economic reforms. While not universally cheap, EM equity valuations are not unreasonable and we continue to find bottom-up opportunities. A month ago, much of the news from the emerging markets (EM) was negative. We saw headlines highlighting the liquidity headwinds created by U.S….

Special report – 2014 mid-year review and outlook

Columbia Management, Investment Team | June 16, 2014

…erforming. Outlook: Developed world equity markets do not leap out as intuitively cheap until one compares their valuations to the fixed-income markets, which are trading at very long-term historical low yields. On that relative basis and given reasonably strong balance sheet and cash flow characteristics (specifically in the U.S.), equities look pretty attractive. Emerging market valuations do look more attractive on an absolute as well as relat…