2016 INVESTMENT OUTLOOKSURFING THE VALUE WAVE
Attractive value is evident.
Higher US interest rate concerns and slower China growth fears have resulted in some good value appearing. This is particularly evident within Asia where valuations have fallen towards 1.5x price to book1. When they have fallen this low, Asian equities have historically rallied an average 95% over the next five years2.
But, it will not be plain sailing. A “profit recession” – in which earnings results do not match forecasts – is a real risk. This risk appears discounted in many instances, but it remains.
The income story also looks to have further life given the likely slow pace at which US rates will likely rise.
In the following articles, our CIOs focus on 2016 opportunities and risks they see as they surf the value wave.