Gam Star global quality invests in the US, Western Europe and parts of the Pacific Basin such as Australia, Hong Kong and Japan. It aims for growth by investing mainly in the equities of established quality companies that are attractively valued, with a history of stable margins and sales growth. It is managed for Gam by Manning & Napier advisors, which already runs the GAM Star US All-Cap Equity and Star Global Equity Inflation Focus funds
Other factors that Manning & Napier’s investment team will look for are strong dividend yields and cash flow yields.
Despite the developed market bias, the fund can invest up to 25 per cent in emerging market equities, which gives the investment team some flexibility.
Developed markets have not been growing as fast as developing regions but valuations are attractive and the bigger firms that lagged earlier in the year could outperform, making Gam’s fund attractive.
Emerging market equities may still have better growth potential overall, but there is uncertainty around whether inflation has peaked. Recent interest rate rises may or may not have been enough to keep inflation in check, and further rate increases could impact negatively on growth so governments need to proceed with caution.
Developed markets are also grappling with inflation and interest rates, among other things such as European sovereign debt, but they could do well going in to 2012 as long as another slowdown is avoided.