About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Friday, March 22nd, 10:27PM
rss
Latest Headlines

Bull market's last charge

A last hurrah on international equity markets may provide opportunities for investors this year, but the local options are more limited, one fund manager says.

Thursday, February 7th 2019, 6:00AM

AMP Capital has released its latest quarterly outlook, noting that it expected international equity markets to head towards a "final climax" of the longest bull market in history this year.

"For many asset classes, returns effectively ‘fell off a cliff’ in December, with year-to-date gains erased in a concentrated near-panic that pulled the key US equity market down from October by -19.6% at the Christmas Eve lows  the end of a bull market)," it noted.

"While some of the forces driving that correction are undeniable, such as slowing global growth and corporate earnings, political risks in the US and UK, a sluggish Europe and uncertainty over China, oil and trade, we believe that the degree of weakness seen in December was greatly overdone.

"The New Year brought a reconsideration of the prevailing negativity. This has been expressed in a rally in global equities, which are now up by more than 5% only three weeks into 2019. The scale of the sentiment reversal is shown by the S&P 500 index, which having bottomed in the last week of December, has subsequently staged a 14% rebound."

AMP Capital said active asset allocation could exploit the pricing overshoots that developed in such uncertain markets, and it was utilising the current uncertainty to lift its exposure to international equities.

"Value has improved, so our long-standing neutral allocation is no longer appropriate."

AMP Capital's New Zealand head of investment strategy, Greg Fleming, said he expected New Zealand's market would not have as far to climb in its last peak of the cycle - largely because it did not fall as much as others did in last months of 2018..

At its weakest point last year, it was only down minus 8% from its peak.

The local market was now almost back where it started, he said, while international markets were still 7% or 8% below.

Valuations were much higher in New Zealand than globally, he said, so there was less scope for upside.

"Unless there's an uptick in consumer spending or other factors we're not pricing in, we wouldn't see New Zealand being as strong."

He said it was tough to make asset allocation decisions because "no one is that keen on the bond market because yields are so low".

Ten-year local bonds were still at about 2.2%, which was less than a term deposit.  That meant all decisions were made between cash and the equity markets.

Fleming said listed real estate was likely to be the strongest performing asset class this year, providing interest rates stayed low.

Tags: AMP Capital asset allocation

« Is FSC taking adviser mantle?Pathfinder sells half its business »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • [The Wrap] Soothing words from the minister
    “Apposite commentary from commentary in ifa Bulletin Risk by Adrian Flores - March 22, 2019 Life commissions ‘good...”
    13 hours ago by Murray Weatherston
  • Partners pulls ads after mosque tragedy
    “Brilliant adds hopefully they return very soon.To be fair there wouldnt be an add shown that someone couldnt take offence...”
    14 hours ago by Brian W Brown
  • Mint axes performance fees
    “Have to laugh and wonder why this wasn't an issue during 5 years as a FMA Board member. Mint appear to have had a reasonable...”
    19 hours ago by MPT Heretic
  • Mint axes performance fees
    “Congratulations, Rebecca Thomas and Mint: on the face of it a positive move. Time for FMA to come to the party; and for...”
    21 hours ago by Simon H
  • [The Wrap] Soothing words from the minister
    “Completely agree Murray. The insurers have taken the opportunity to kill off the trips, they're costly and a hassle to plan,...”
    22 hours ago by JPHale
Subscribe Now

Weekly Wrap

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.79 4.55 4.79 4.99
ANZ Special - 4.05 4.29 4.49
ASB Bank 5.80 4.45 ▼4.49 4.89
ASB Bank Special - 4.05 ▼3.99 4.49
BNZ - Mortgage One 6.50 - - -
BNZ - Rapid Repay 5.95 - - -
BNZ - Special - 4.05 4.29 4.49
BNZ - Std, FlyBuys 5.90 4.69 4.79 4.99
BNZ - TotalMoney 5.90 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.15 5.20 5.25 -
Lender Flt 1yr 2yr 3yr
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.70 4.85 -
Housing NZ Corp 5.80 4.69 4.79 4.79
HSBC Premier 5.89 3.99 3.99 4.39
HSBC Premier LVR > 80% - - - -
HSBC Special - 3.69 3.95 3.95
Lender Flt 1yr 2yr 3yr
ICBC 5.80 4.59 4.69 5.09
Kiwibank 5.80 4.80 4.94 5.24
Kiwibank - Capped - - - -
Kiwibank - Offset 5.80 - - -
Kiwibank Special - 4.05 ▼3.99 4.49
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 5.10 5.45 -
Resimac 5.30 4.86 4.94 5.30
RESIMAC Special - - - -
SBS Bank 5.89 4.85 5.05 5.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 4.05 4.29 4.49
Sovereign 5.90 4.45 ▼4.49 4.89
Sovereign Special - 4.05 ▼3.99 4.49
The Co-operative Bank - Owner Occ 5.75 4.10 4.29 4.49
The Co-operative Bank - Standard 5.75 4.00 4.79 4.99
TSB Bank 5.80 4.55 4.69 4.99
TSB Special - 4.05 4.19 4.49
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.95 4.69 4.79 5.19
Westpac - Offset 5.95 - - -
Westpac Special - 4.05 ▼3.99 4.59
Median 5.89 4.50 4.69 4.84

Last updated: 22 March 2019 10:22am

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com