With global growth weak and earnings growth “small and anaemic”, investors should consider defensive asset classes, argues Perpetual Investments.
In a note to investors, Perpetual Investments' head of investment strategy, Matthew Sherwood, pointed to sub-3 per cent global growth and stagnating corporate earnings as evidence that “no one could seriously claim markets are in the clear”.
“There is no doubt that with all these cross currents, the US Federal Reserve remains the main game in town and that the tug-of-war between them and financial markets continues to push and pull sentiment,” Mr Sherwood said.
Investors should ensure they know which conditions would make upside risk “constructive” for their portfolios, and how to play a “defensive game” in the meantime “given the valuation richness in many traditional defensive asset classes”, he said.
Mr Sherwood also noted that while global earnings fundamentals are not as bad as initially priced in in February, they are not as positive as recent price action implied.
Read more:
Wealth management lagging behind on technology
Chinese growth 'won't make you rich'
AMP has revealed its earnings in its Australian wealth management business declined by $28 million over the 2018 financial year. ...
Treasurer Josh Frydenberg has told the banks and regulators that they will face an inquiry down the track to ensure they have lifted their g...
One global asset management firm has made a case for an interest rate cut from the RBA given current market conditions in Australia. ...
