The case for setting up a Market Strategy Americas
While a monetary tightening cycle has started, overall financial conditions are still highly supportive for further share buybacks and M&A. In recent months, credit growth has experienced a pause. The weak numbers are mainly due to a post-hurricane bounce (hurricane season 2017); however, reconciled figures point downwards. Higher commodity and energy prices are broadly positive for industrials and capital spending; one of the largest industrial areas for capex is the oil and gas industry. The rise in core inflation is not a concern. Finally, we note that the revised EPS growth for 2018 is now set for a whopping 17%.
Scope of investments
Our core equity portfolio emphasizes passive strategies that tend to outperform the market over a given period of time, through the combination of trackers, plus an optionality. Since the average market is toppish, typically, we may use a Low Vol Buy-Write products or Bonus Certificates to enhance the performance opportunity.
The complementary allocation reflects opportunities that benefit from global macro trends. We select several companies within each promising industry whose financial strength and business model are best positioned for long-term capital appreciation. This part of the portfolio can contain some 15-20 stocks with exposure to our preferred secular trends.
