Perspectives Blog

What to make of the rebound in emerging market equities

Dara White, Senior Portfolio Manager | April 14, 2014

…-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. QE tapering, Russia’s aggressive opportunism in the Ukraine, China’s imminent hard landing, Brazil’s drought leading to an imminent energy crisis, a state of emergency being declared in Thailand, Turkey’s political soap opera continuing with business and political leaders being arrest…

Opportunities in global infrastructure

Peter Santoro, Senior Portfolio Manager | February 3, 2014

…l replace telephone poles; natural gas pipelines will displace coal trains fueling utilities. To illustrate the size and focus of the global demand for infrastructure, let’s examine some examples of spending trends in Brazil, China, India and the United States. Brazil • In August 2012, the government said it would spend $69 billion by the end of 2014 to improve its transportation systems. • The infrastructure spending for the 2014 World Cup and f…

Special report – Commodity markets outlook

Columbia Management, Investment Team | July 21, 2014

…d overweight positions in some sectors we have to hold underweights in others, since we are always fully invested in commodities. Our significant underweight in copper and aluminium results from the negative news flowing from China, whether it concerns the economy, the housing market or the financial sector. Prices are unlikely to pick up until this negative newsflow abates and there is a change in the demand dynamic in China. However, we would e…

Special report – 2014 mid-year review and outlook

Columbia Management, Investment Team | June 16, 2014

…s to the level of rates. In addition, slower global growth and rising geo-political risks present downside risks to growth, although supportive central bank actions will continue and perhaps accelerate, particularly in Japan, China and the eurozone. Taxable bonds Colin Lundgren, Head of fixed income Review: 2014 has been a happy new year for taxable fixed-income investors. After experiencing mostly negative total returns in 2013, the surprising c…

Income inequality, disinflation and profit growth – the role of globalization

March 10, 2014

…Data for consumption inequality and household debt-to-income ratios across income deciles outside developed markets is sparse. But it does not appear obvious that patterns in the U.S. are at all in evidence in countries like China. Interestingly, despite levels of inequality rising within individual states, the rapid economic growth seen at the overall economy level for EM has seen global inequality — measured at the household level — first plat…

Harvesting a New Moderation in Asia

Soo Nam Ng, Head of Asian Equities | June 23, 2014

…Asia found themselves carrying cost structures that could put them in danger of extinction. Capital expenditure plans had to be scaled down and ongoing expenses had to be cut. Li Ning, a sports apparel and equipment maker in China, is a company that has had to make painful adjustments — its same store sales growth had come in drastically below projection and inventories started to pile. A new management team had to be installed and unprofitable…

Global market mid-year outlook

Mark Burgess, Chief Investment Officer, Threadneedle Investments | June 16, 2014

…recently on the value offered by EMD, especially for investors seeking absolute levels of yield. However, we maintain a bias against emerging market (EM) equities as we are still concerned about the macroeconomic outlook for China (which is a large constituent of the EM equity indices but only a relatively small component of EMD indices). It is very hard to find examples of credit expansion on the scale seen in China which have not caused policy…