Perspectives Blog

Global asset allocation outlook (as of March 2014)

Columbia Management Global Asset Allocation Team, | April 7, 2014

…oftness in housing and payback from a very strong inventory cycle in the second half of 2013. In addition, geopolitical fears intensified with Russia’s incursion into Ukraine and nervousness about the shadow banking system in China resulting in a larger than expected slowdown in the Chinese economy. Despite these setbacks, we believe U.S. growth metrics are still very positive, in the range of 2%-3% this year. Estimates for first quarter gross do…

Thoughts on navigating market volatility in today’s technology markets

Rahul Narang, Senior Portfolio Manager | April 28, 2014

…ructural changes within an industry such as consolidation Some current themes we find attractive include: • Businesses exposed to the continued move towards e-commerce • Pivot of business models towards mobile • Growth in the China Internet sector • Industry consolidation • Content providers with growing abilities to monetize across new mediums So, within this approach, how do we respond to the recent painful move down in certain sectors of the t…

Emerging Markets: Waiting on exports

Anwiti Bahuguna, Ph.D., Senior Portfolio Manager | March 31, 2014

…ould infect the developed economies. Data released in the early part of the year (factory orders, PMIs) continues to show further slowdown in the Chinese economy which has the markets worrying about a “hard landing” scenario. China is reaching the limits of a debt-fuelled and investment-led growth model and could be headed for not just a slowdown but significant stress in the financial sector of the economy. Most economists believe that growth wi…

Predicting new drug sales is more art than science

Harlan Sonderling, CFA, Senior Healthcare Analyst | April 14, 2014

…ping economies fluctuate more often and with higher variability than developed economies, and their level of regulatory oversight is lower. Several major manufacturers recently learned the hard consequences of rapid growth in China. One of the key reasons behind global, specialty and generic pharmaceutical industry consolidation may be the companies’ strategic desire to diversify product portfolios in order to hedge commercialization risk in a di…

Finding the sweet spots in corporate spending

Robert McConnaughey, Director of Global Research | February 24, 2014

…cost advantage rather than location in lower human labor cost geographies. This trend has now extended well beyond robotics in factory production. In mining, for example, where general capex has plunged on falling demand from China, spending is moving forward on items such as increasingly autonomous trucks, trains and even drilling machinery. Large scale agriculture is following a similar path where networked machines can plant, irrigate and harv…

When the QE tide recedes, focus on what is revealed

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

…ped drive significant advances across emerging financial markets. However, investor concerns about declining global competiveness and stalling structural advancements began to accelerate in 2013. Recently announced reforms in China may help to lend greater sustainability to the Chinese growth story, but the details around implementation will be crucial not only to Chinese prospects (where market valuations reflect a great deal of skepticism), but…

Gut check: The outlook on fixed income

Colin J. Lundgren, CFA, Head of U.S. Fixed Income | February 24, 2014

…xed income (18%). Last year, EM bond returns ranked near the bottom, losing more than 4%. Recent poor performance can be explained as payback (reversal of strong inflows when the sector was in favor), concerns about tapering, China slowing and deteriorating growth prospects more broadly in EM countries. Countries in the EM debt market that suffered the most last year were those that ran large current account deficits and faced potential funding c…