The recent panic selling is providing opportunities to investors with a medium to long-term investment horizon, according to Aberdeen Asset Management’s (Aberdeen) global equities team.
“Having been cautious about equity markets for some time, we view the ongoing downward correction as quite healthy,” Aberdeen head of global equities Stephen Docherty said in a statement.
“We also believe, as global economic growth slows, corporate profits expectations will continue to be revised down, and that this will result in some attractive buying opportunities for investors with longer-term horizons.”
For the next two to three years, Aberdeen is looking to position its International Equity Fund by selling companies that have performed well, and buying into new opportunities.
The fund has had a net decline of 11.37 per cent for the 12 months to September 30, compared to the MSCI World ex-Australia Index’s 17.24 per cent slump in the same time, according to Aberdeen’s website.
Meanwhile, share price volatility is likely to continue, and the second phase of the credit crisis is just beginning, Aberdeen added in the statement.
With United States consumer confidence at 30-year lows amid falling house prices, the outlook for consumption is looking bleak, it said.
Companies are likely to cut prices to cope with falling demand, putting pressure on future margins and corporate profits.
