Fund selectors and advisers currently face a difficult choice. Various economic and business information flows have the potential to point to widely differing potential outcomes for investors. Asset allocation may never have been more challenging.
On one hand many companies are, as widely predicted by some managers earlier in the year, reporting earnings on the upside. But, on the other side, the weight of macroeconomic concerns continue to stifle optimism. A recent note from Gartmore summarised the problem pointing to a clash between fundamentals and macro fears. In the case of the US it said: “Movements in equity markets are being driven by global economic events rather than individual sector, industry and company fundamentals. These fears appear at odds with reality.” Meanwhile, a recent survey of 136 advisers by Baring Asse...
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