CIO of equities David Kiddie says he sees buying opportunities in the latest market turmoil, underpinned by the encouraging macroeconomic outlook.
Kiddie admits that investing in equity markets has been relatively straightforward in the last five years, although there have been corrections too.
He says: “Such volatility has tended to surround individual one-off events such as terrorist activity or higher energy prices and it has been sensible to view each of these phases as chances to invest more.”
He adds with interest rates remaining at historically low levels, he does not expect a significant decline in either economic activity or company profits and since inflation is not likely to rise significantly, there is little reason for interest rates to increase significantly.
Kiddie says: “This is all pretty good news for equity investors. Investors should look at volatility as a potential opportunity to invest.”
He claims that promising investment categories include emerging markets, saying: “Here the growth profile is strong and financial conditions are reasonably healthy.”
As far as developed markets are concerned, he highlights funds with managers with strong stock-selection capabilities, and fund of fund products, particularly in the arena of hedge and absolute return funds.
Kiddie says: “I firmly believe that we will see a gradual but continual underperformance of US related equities in the coming years. The likely beneficiaries will be those areas that demonstrate superior growth, such as China.”