Perspectives Blog

Thoughts on navigating market volatility in today’s technology markets

Rahul Narang, Senior Portfolio Manager | April 28, 2014

We are seeing a market rotation from momentum to value on macro factors and internal market dynamics. Keys are to stay diversified, look for businesses with strong moats and that produce solid cash flow and compare to historical valuations. Favored themes are industry consolidation plays, mobile and Internet. In recent weeks there has been a dramatic shift in alpha generation from hyper growth technology stocks to more value-oriented names. We…

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

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

…support this trend. In our country scorecard, U.S. rankings improved significantly. Earnings growth has improved and technical conditions have strengthened. U.S. monetary policy remains largely accommodative and stock market valuations are not overtly elevated for this stage in the business cycle. In light of these developments, we raised our preference for U.S. equities from a modest underweight to neutral. Related to this increase, we raised U…

An improving outlook for European equities

Philip Dicken, Head of European Equities, Threadneedle International Ltd | October 18, 2013

Economic data confirm that the Eurozone has exited recession. There are signs that corporate transactional activity is increasing as businesses become more financially secure. While Europe remains beset by challenges, the economic background is improving, valuations are looking more attractive and investors who have not been paying attention to European stocks may want to take a closer look. According to Eurostat, the 17 eurozone member states…

When the QE tide recedes, focus on what is revealed

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

…ll increased cost-competitiveness. On the risk side of the ledger is the lack of adequate progress around fiscal reform or entitlements, the challenges of growing profits off of a base of historically high margins, and equity valuations that, while not excessive, leave far less margin of safety than we saw at this time a year ago. Our European team is optimistic that we will see a continuation of gradual European recovery, but on both the global…

Special report – 2014 mid-year review and outlook

Columbia Management, Investment Team | June 16, 2014

…llowed a similar pattern with core markets performing generally in line with the U.S. and peripheral markets outperforming. 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.), eq…

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….

Scarce growth – Can the tortoises continue to outpace the hares?

Robert McConnaughey, Director of Global Research | May 19, 2014

…oes not appear overvalued. However, considering the historically low interest rate environment, equities look remarkably inexpensive compared to fixed income alternatives (including even debt from the same issuer). As for the valuations of premium growers relative to the rest of the market, our work suggests that statistically, the top growers have given back most of their P/E expansion relative to the broader market in this sell-off. So, we do n…