Meanwhile, the financial markets will have to deal with a phase of central
\nbank monetary policy normalization. So adaptability and flexibility will be the watchwords in 2018 if
\ninvestors are to derive the full advantages from investment opportunities.<\/p>\n
A tricky year for central banks According to Philippe Waechter, Chief Economist at Natixis Asset Management, the macroeconomic The fixed income markets favor the bold!<\/strong><\/p>\n Ibrahima Kobar, deputy Chief Executive Officer and Co-Chief Investment Officer at Natixis Asset Political risks seen at the start of 2017 are now far off, and while external shocks cannot be ruled out, the Ibrahima Kobar points out sovereign debt in peripheral markets in Europe, but especially in emerging Momentum and flexibility on the equity markets<\/strong><\/p>\n According to Yves Maillot, Head of European equities at Natixis Asset Management, the macroeconomic Asset allocation: taking a contrarian approach to generate yield<\/strong><\/p>\n The current market context is favorable for risky assets, but remains fragile. Investors have massive Corporates and households seem to have regained their confidence in the future in 2017 against a
\n<\/strong><\/p>\n
\nsituation has recovered a more normal framework and pace for growth. \u201cBusiness leaders in developed
\nand emerging markets now have a positive outlook on their environment and this stance is set to lead to
\nmore jobs and investment. Households are confident and the risk of deflation has been averted\u201d<\/em> he notes.
\nMeanwhile further support is provided by more relaxed fiscal policies. \u201cHowever, one question remains:
\nhow will these expectations of very strong economic performances fit with ongoing monetary
\naccommodation?\u201d<\/em> wonders Philippe Waechter. Central banks must take on board this optimistic view of the
\neconomy while maintaining an accommodative slant.
\nPhilippe Waechter believes that three other risks should be closely monitored. Firstly, Brexit will not only hit
\nthe British economy, but also some business sectors in Europe, such as aviation, banking and automotive.
\nSecondly, the review of US banking regulation is worrying for the future stability of the financial system.
\nThirdly, negotiations on NAFTA are a source of concern as changes to the agreement would be bad news
\nfor the three member countries and could trigger the renegotiation of other free trade agreements and
\nthreaten world momentum. \u201c2018 may be the cycle peak but it will certainly be a turning point, and in
\nEurope it must be the starting point for a new age. Leaders in the euro area must take the opportunity of a
\nsturdy economic backdrop and a decline in populism to take their economic policy and reform of institutions
\na step further\u201d<\/em> concludes Philippe Waechter.<\/p>\n
\nManagement, believes that bond funds will offer attractive opportunities in 2018. \u201cWe are embarking on a
\npositive period for bonds, with a virtually \u201cvirtuous\u201d circle as monetary policies are well defined and the
\ninterest rate trend ahead is clear\u201d.<\/em><\/p>\n
\nmarkets now know how to price them in. Lastly, the macroeconomic context is buoyant and distortion in
\nbond valuations is poised to ease as a result of a reduction in the ECB\u2019s asset purchase program.
\n2018 is set to be a good vintage for bond investors, with issues largely oversubscribed due to the shortage
\nof securities. \u201cIn a context of ongoing broadly negative real rates, it is still key to look for yield and so
\ninvestors must be daring\u201d<\/em> he notes. <\/p>\n
\ncountries, which have managed to fight off inflation and get back on the path to growth, so they should
\nharbor attractive opportunities unless there is a shock on US rates and the dollar. High Yield credit can also
\nprovide returns despite narrow spreads, but requires a highly selective approach. Convertible bonds will
\nalso enable investors to lock in yield in a positive context on the equity markets. \u201cLastly, it will be vital to
\nskilfully manage duration, the historical aspect of performance, via products that combine short- and longterm
\nsecurities in order to adapt to all circumstances\u201d<\/em> concludes Ibrahima Kobar.<\/p>\n
\nenvironment is almost perfect for equities. However, the normalization of monetary policy, fluctuations in
\nexchange rates or a likely return to volatility could cast a shadow. \u201cMomentum will be the leitmotiv on the
\nEuropean equity markets in 2018 more than ever, but a stock-picking approach must remain flexible\u201d<\/em>
\nexplains Yves Maillot. \u201cWe also have a focus on M&A as the pace is poised to pick up, particularly in the
\nfood & beverages sector, healthcare & pharmaceuticals, telecoms and technology\u201d.<\/em> Small and mid caps
\nshould also continue to perform well. Lastly, emerging markets will harbor attractive opportunities as they
\nbenefit from strong growth, prospects for an improvement in earnings and attractive valuations, with a 25%
\ndiscount to developed markets. Emerging Asian markets are the most attractive in our view. \u201cBut just as in
\ndeveloped countries, flexibility will be needed in light of persistent risks: the 2017 winning trio may not last
\n(weaker dollar, rising commodities prices and improvement in earnings growth), while risks on Latin
\nAmerica still remain\u201d<\/em> concludes Yves Maillot.<\/p>\n
\nexposure, so the slightest disruption or even just profit-taking for technical reasons could send them into a
\nsell-off one after the other like lemmings and push the markets into a downward spiral. \u201cWe must be careful
\nnot to see this coming year as linear and the challenge will be to build up a portfolio with attractive yield
\nwhile remaining flexible and adaptable to react quickly to any changes\u201d <\/em> explains Franck Nicolas, Head of
\nInvestment & Client Solutions at Natixis Asset Management. Against this backdrop, the company has a
\npreference for European equities, which gain from more accommodative monetary policy and boast more
\nattractive valuations, although the political risk premium is set to persist. Natixis Asset Management also
\nprefers debt with strong spreads, particularly High Yield which carries an attractive premium in the absence
\nof interest rate risk. \u201cAnother key theme will be emergings, which are buoyed by high commodities prices.
\nWe will steer clear of Latin America, but focus on emerging Asia and Eastern Europe. The priority on these
\nmarkets will be hard currency debt, while emerging currencies remain risky\u201d <\/em> notes Franck Nicolas. Lastly,
\ngold has admittedly lost its appeal but will remain a safe haven in the event of volatility on the equity
\nmarkets. <\/p>\n","protected":false},"excerpt":{"rendered":"
\nflattering macroeconomic backdrop. However, Natixis Asset Management\u2019s experts caution against
\nexcessive optimism, as 2018 will not be entirely devoid of events that could throw a spanner in
\nthese well-oiled works. <\/p>\n","protected":false},"author":20,"featured_media":67725,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1480],"tags":[1809,1655,1659,1651,2087,2068,1678],"_links":{"self":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/67727"}],"collection":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/users\/20"}],"replies":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/comments?post=67727"}],"version-history":[{"count":0,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/67727\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media\/67725"}],"wp:attachment":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media?parent=67727"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/categories?post=67727"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/tags?post=67727"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}