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Insight cautious on growth

Insight Investment’s multi-manager team believes that earnings from global equity markets will grow by less than other analysts have predicted.

The multi-manager team says it expects global earnings’ growth of around 6 per cent, which is far lower than the double-digit growth predicted by other firms.

Director of portfolio strategy and construction Dr Ana Cukic-Munro thinks analysts have been optimistic and some fund managers are being overly bullish.

As a result, Insight’s multi-manager funds are to go underweight on equities. They have also selected more defensive managers within the equity exposure that they do have.

Insight expects that string fund managers buying attractively valued shares and finding companies that can grow faster than the wider market will be in a position to deliver heavy returns.

The team also expects beta fund managers to perform poorly, as will trend followers who go with the herd and ride the market.

Managing director of multi-manager business Nigel Whittingham thinks Insight’s selection process will reap rewards this year.

He says: “The qualitative allocation tools, risk control techniques and strong manager selection and asset allocation methodology have all worked to our advantage in low and negative return environments.”

Cukic-Munro says: “We expect markets will be at similar levels in 12 months time to where they are now. We feel it will take another 12 months for the earnings growth analysts expect to finally arrive.”

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