Neuberger Berman senior investors see investment potential across asset classes

Managers and strategists at Neuberger Berman envision positive momentum across many asset classes in 2014, as the global economy stabilizes and generates moderate growth.

As the investable universe has grown-across borders and asset categories-this year’s edition is deeper than ever before, reflecting the firm’s broad perspective and client base.

“From an economic perspective, things are improving across a number of major economies,” said Joseph Amato, President and Chief Investment Officer of Neuberger Berman. “As the Fed and other central banks adjust their approaches, investors should remain alert. Inflation trends remain moderate and we do not expect a significant uptick in rates this year. These shifts in policy merits close attention as investors adjust portfolios to capitalize on the improved growth and somewhat tighter monetary conditions.”

In equities, Amato anticipates continued earnings growth this year tied to modest operating leverage as the economy picks up. In fixed income, investors can likely expect slow and steady growth and the potential for rising rates, said Brad Tank, Chief Investment Officer, Fixed Income.

“In my view, we’re probably in the middle innings of this growth phase in the US,” Tank said. “Things are getting better, but not rapidly. For the coming year, we anticipate a relatively benign growth environment, with continued momentum in the US, a modest acceleration in Europe and an ‘Abenomics’-driven recovery in Japan, offsetting China’s slower growth trajectory.”

An improving economy should lead to more private equity buyout activity, according to Anthony Tutrone, Neuberger Berman’s Global Head of Alternatives. “At this point, we haven’t gotten to a major acceleration in buyouts, but we believe deals will begin to pick up,” he said.

Alan Dorsey, the firm’s head of Investment Strategy and Risk thinks a key issue for 2014 is achieving incremental return-whether through capital appreciation or additional yield-mindful that return outlooks have gradually shifted downward while interest rates remain extremely low. He thinks alternatives are one key area that has gained traction, but another particularly important one from a portfolio allocation standpoint is emerging markets.

The full version of Solviong 2014, where these comments have been extracted from, is downloadable here.

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