• Home
  • Sustainable Investment Week
    • ESG
    • Sustainable Investment
    • Sustainable Investing
  • Equities
    • UK
    • Global
    • Europe
    • US
    • Asia
    • Emerging markets
    • Specialist
  • Bonds
  • Multi-asset
  • Funds
    • Unit trusts/OEICs
    • Investment Trusts
    • VCTs/EIS
    • Platforms
    • ETFs
    • Pensions
  • Regulation
  • Diversity
  • People moves
  • Events
  • Financial library
  • Industry blogs
  • Digital Edition
  • Newsletters
  • Sign in
    • logged-in-corporate-menuYou are currently accessing Investment Week via your Enterprise account.

      If you already have an account please use the link below to sign in.

      If you have any problems with your access or would like to request an individual access account please contact our customer service team.

      Phone: +44 (0) 1858 438800

      Email: [email protected]

      • Sign in
     
      • Account details
      • Newsletters
      • Contact support
      • Sign out
     
  • Follow us
    • Twitter
    • LinkedIn
    • Newsletters
    • Facebook
    • YouTube
    • Instagram
  • Register
  • Events
    • Upcoming events
      event logo
      European equities: How to stay in sync with the cycle and prepare for recovery

      Our expert panellists on Investment Week’s latest webinar will discuss how investors in Europe should best position themselves for the new economic cycle, which is likely to have very different characteristics from the last.

      • Date: 04 Mar 2021
      • ONLINE, ONLINE
      event logo
      Fund Selector Briefing: Channel Islands 2021

      This interactive briefing will bring together senior investment professionals involved in the fund selection process from across the Channel Islands to hear from and question leading fund managers covering a range of asset classes.

      • Date: 04 Mar 2021
      • ONLINE, ONLINE
      event logo
      Funds to Watch Conference - March

      The Funds to Watch series from Investment Week allows sponsors to show-case up and coming or evolving funds and managers to some of the most influential fund selectors in the UK.

      • Date: 09 Mar 2021
      • ONLINE, ONLINE
      event logo
      Professional Adviser Working Lunches 2021

      A series of invitation only "meet the manager" virtual lunches to discuss how a multi-asset strategy can benefit your clients and your business.

      • Date: 10 Mar 2021
      • ONLINE, ONLINE
      View all events
      Follow our events

      Sign up to receive email alerts about our events

      Sign up

  • White papers
    • Fidelity logo whitebackground1200 630px 1 120x194
      The ETF Evolution

      In this exclusive magazine exploring the evolution of quality and income ETF strategies, King reveals that each ETF follows an investment strategy developed by the group's in-house research team that leverages fundamental active insights to inform the factor definitions and applies portfolio construction principles to mitigate the unintended biases.

      Download
      7ded04ac5957a69da8d1df41c8f21a0c33988d8f 1 120x194
      A bet on the UK bounce back

      David Cumming, Aviva Investors' chief investment officer for equities, last year witnessed turbulent times for UK equities but he remains positive about the market in which he has a personal as well as a professional stake.

      Download
      Find white papers
      Search by title or subject area
      View all white papers
  • Industry blogs
  • Digital Edition
Investment Week
Investment Week
Sponsored by BMO
  • Home
  • Sustainable Investment Week
  • Equities
  • Bonds
  • Multi-asset
  • Funds
  • Regulation
  • Diversity
  • People moves
  • logged-in-corporate-menuYou are currently accessing Investment Week via your Enterprise account.

    If you already have an account please use the link below to sign in.

    If you have any problems with your access or would like to request an individual access account please contact our customer service team.

    Phone: +44 (0) 1858 438800

    Email: [email protected]

    • Sign in
 
    • Account details
    • Newsletters
    • Contact support
    • Sign out
 
  • Trending
  • IW 22 Feb issue
  • Past IW issues
  • Jupiter record AUM
  • IA's diversity pledge
  • ESG Festival tickets
  • Markets

Cornelian AM's Kilpatrick: Confidence will be undermined but recession fears are overstated

Risk assets 'can provide positive returns'

Hector Kilpatrick of Cornelian Asset Managers
Hector Kilpatrick of Cornelian Asset Managers
  • Jayna Rana
  • Jayna Rana
  • @Jayna_Rana
  • 28 February 2019
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Share on Whatsapp
  • Send to  
0 Comments

There will not be a recession for at least another two years but investors should not anticipate a "bonanza" 2019 either, according to Hector Kilpatrick, chief investment officer at boutique fund house Cornelian Asset Managers.

While many fear some form of correction is on its way, following the heightened volatility (see chart below) seen in the fourth quarter of 2018, Kilpatrick, who runs the Cornelian Risk Managed fund range, believes fears are overstated, particularly in the US.

"We certainly will not have a bonanza year, but markets are likely to rise by a little more than they currently are throughout 2019," he said. 

Related articles

  • Repairing a TAR-red reputation: Time to show some love to the targeted absolute return sector
  • Welcome to 'ChinaCare': Healthcare explosion at the heart of country's booming 'new economy'
  • Vital signs: What are the three compelling catalysts of China's booming healthcare sector?
  • Ox marks the spot? Assessing the animal spirits of Chinese equities
  • Consistent 50: Meridian European Smaller Co's leads as top funds hold firm

"Of course, it will be tested again at some stage with geopolitics likely undermining confidence again, but we do not see a recession this year or next.

"Investors are underestimating the resilience of the consumer in the US. The labour market is strong and tight, and consumer balance sheets are looking healthy.

"With capitulation from the US Federal Reserve in the face of well-anchored inflation expectations, we think risk assets can continue to produce a positive return."

Cornelian's Millar: Peak Brexit uncertainty provides opportunities

The CIO said a more dovish Fed as well as small but meaningful progression towards an easing of monetary and fiscal policy in China reduces the risk of an immediate repeat of the volatility seen in late 2018.

He added: "What we first saw in October when equity markets fell was on the back of fears of the Fed tightening monetary policy too much and global growth slowing faster than expected.

"It was only in mid-November when the oil price broke below its trading range that credit investors took note and spreads started to widen."

"That leg down in equities began which meant 2018 was a good year for earnings growth but a bad year for stockmarkets.

"However, now interest rates are on pause and the risk of them rising inappropriately has diminished as has the risk of the US dollar continuing to strengthen in a way that could undermine other economies. That should help confidence."

Europe

Kilpatrick said the only real issue is that forecasts for global earnings growth are still too high and the eurozone continues to be in a "bad way" with negative interest rates still a factor and low confidence in the banking sector.

Commenting on potential headwinds closer to home, Kilpatrick said he does not believe a no-deal Brexit is likely.

Brexit Blog: The latest Brexit news as it happens

"People are already talking about extensions to the 29 March deadline and if push comes to shove, the UK could revoke Article 50," he said.

"That would be a bit of a nuclear option, but it could happen along with a message that we need more time to think about the next steps. There may be even be a referendum, which is the ultimate backstop to a disorderly Brexit."

"No political party wants their name on a hard Brexit. We have sterling hedged 30% of international equity exposure in each of our risk-managed funds in case sterling strengthens from here."

alt='Performance of major global equity markets in Q4 2018 (%)'

alt=''

Investment Conundrums

In this new series, Investment Week speaks to senior figures at asset management and wealth firms about the big global debating points for managers and investment committees

  • Tweet  
  • Facebook  
  • LinkedIn  
  • Share on Whatsapp
  • Send to  
  • Topics
  • Markets
  • Global
  • Investment Conundrums
  • Cornelian Asset Managers
  • Hector Kilpatrick
  • Recession
  • global recession
  • Brexit
  • brexit negotiations
  • Article 50
  • market corrections
  • China
  • Europe
  • European Union
  • earnings growth
  • credit

More on Markets

How has the cost of oil, housing and gold compared over the past 25 years?
IW25 Shorts: How has the cost of oil, housing and gold compared over the past 25 years?
All the latest news, analysis and content about the Covid-19 outbreak
Coronavirus Blog: England on a 'one way road to freedom' as restrictions set to end in June
Market Movers blog: What's the latest in markets?
Market Movers Blog: Platform bosses urge Treasury to open up 'unfair' IPO market - reports
Woodford recently announced he would launch a Jersey-based biotech fund
'No chance': Answers needed as industry reacts to Woodford's slated return to fund management
IW Five Easy Pieces
Five Easy Pieces: What were the biggest stories from the past month?

Most read

'No chance': Answers needed as industry reacts to Woodford's slated return to fund management
'No chance': Answers needed as industry reacts to Woodford's slated return to fund management
Aberdeen Standard Investments introduces Reddit clause to silver risk factors
Aberdeen Standard Investments introduces Reddit clause to silver risk factors
Spot the Dog: Merian acquisition hurts Jupiter but Invesco remains worst culprit
Spot the Dog: Merian acquisition hurts Jupiter but Invesco remains worst culprit
Troy's Francis Brooke to step back from fund management
Troy's Francis Brooke to step back from fund management
Industry Voice: How does an investor make a lightbulb greener?
Industry Voice: How does an investor make a lightbulb greener?
Back to Top
Trustpilot

 

  • Contact us
  • Marketing solutions
  • About Incisive Media
  • Terms and conditions
  • Policies
  • Careers
  • Twitter
  • LinkedIn
  • Newsletters
  • Facebook
  • YouTube
  • Instagram

© Incisive Business Media (IP) Limited, Published by Incisive Business Media Limited, New London House, 172 Drury Lane, London WC2B 5QR, registered in England and Wales with company registration numbers 09177174 & 09178013

Digital publisher of the year
Digital publisher of the year 2010, 2013, 2016 & 2017
Loading