SIG goes overweight equities, prefers emerging markets

Skandia Investment Group (SIG), the investment management business of Old Mutual Wealth Management, has upgraded its equity exposure from neutral to overweight, having been neutral on equities since June.

The chief factors behind the change are continued profit growth by companies, and valuations of equities relative to cash and bonds, SIG said.

However, expectations of falling inflation in emerging markets means it prefers these over developed markets. Growth also continues at higher levels in emerging markets than in developed ones. SIG expects Europe and the US to avoid recession.

James Millard, chief investment officer at SIG, said: “We are aware that the risks to our outlook are higher than normal. While we acknowledge that the outlook for the global economy has dimmed in recent weeks, we think companies will continue to generate solid profits growth and that this, coupled with low interest rates and favourable valuations, will drive equity markets higher.” 

 

 SIG view on asset classes
  Very Positive Positive Neutral Negative Very Negative
Top down   Equities, Cash   Bonds  
Equity regions Emerging Asia Emerging EMEA, Latam, Japan   UK, Europe ex UK, Developed Asia Pacific US
Bond sectors Investment Grade High Yield, Index-linked EMD   Government
Currency Emerging currencies Commodity currencies, GBP USD, Euro SEK Yen, CHF  
Alternatives   Commodities, Property      

 

 

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