The global economy shows signs of accelerating growth, and the global manufacturing purchasing managers index continues to rise. In the February global fund manager survey report, managers cast a vote of confidence in the global economic outlook, with a net 59% of managers People expect that the global economy will accelerate in the next year, and their optimism remains at a high level for two years. Moreover, 23% of managers believe that the global economy will enter a cycle in which growth and inflation are both above trend. This is the first time since the beginning of 2011. .
In terms of tail risks, managers believe that the EU split caused by the European elections, trade wars, and global bond markets Collapse is currently the source of risk that managers are most worried about, accounting for 36%, 32% and 13% respectively.
As managers expect that the global economy will be booming, a net 39% of managers said they are overweighting stocks, which remains unchanged from last month. Moreover, under the outlook for global reflation, managers are optimistic about commodities. The mentality of assets has become more optimistic, flipping from a net reduction of 3% to a net increase of 3%. In addition, as inflation expectations heat up, managers remain pessimistic about the bond market, with a net 59% of managers saying they are reducing their bond holdings, an improvement from 63% last month.
Managers change their minds and emerging markets gain popularity
In terms of regional investment allocation, Franklin Securities Investment Consulting pointed out that emerging markets, which are in the recovery stage and have regained the attention of investors, in 2016 At the end of the year, there was a question mark due to Trump’s victory. However, since this year, Trump’s shortcomings have begun to blunt, with the price-to-earnings ratio being low, and emerging market economies benefiting from strong global growth and rising commodity prices and other factors. , emerging markets launched a retaliatory rebound, and managers also changed their minds and returned to pursue emerging markets. The net underweighting of emerging markets jumped from 6% to a net overweighting of 5% this month, and the ratio hit the largest monthly level in 11 months. increase.
European election issues and geopolitical risks will continue to put EU integration to the test. However, European companies also have the advantages of higher operating leverage, a weak euro, and cheaper valuations, and will benefit first. In response to the accelerating growth trend of the global economy, European stocks, which have the opportunity to make up for their lagging gains, have attracted managers to invest. Managers’ optimism for European stocks has increased from a net overweight of 17% to a net overweight of 23%, making them the most optimistic in February. regional category.
As for the U.S. and Japanese stock markets, managers have not changed much in their allocations, and their net overweight on U.S. stocks has dropped slightly to 13% from 14% last month. Managers’ optimism for Japanese stocks remains at a high level of net overweight of 20%, compared with a net overweight of 21% last month.
Norman Bosma, manager of the Franklin Templeton Growth Fund (the source of dividend distribution of this fund may be the principal), believes that from the main economic indicators in Europe, we can see that economic growth is accelerating, Bond yields are much lower than in 2010, labor cost levels have begun to decline, the current account is improving, and Europe as a whole is showing signs of improvement. However, investors still have a very negative view of Europe, making the price-earnings ratio of European stocks relative to the long-term average. Still nearly one standard deviation lower. With the recovery of the global economy, the fermentation of the weak euro effect, the recovery of commodity prices and other favorable factors, as corporate earnings restart and grow, the current low price-to-earnings ratio of European stocks will also be raised.
Mark Mobius, manager of Franklin Templeton Emerging Countries Small Enterprise Fund, said that as the global economy shows signs of recovery and the U.S. stimulus policy will not be released so soon, coupled with the Fed’s rise in With a cautious attitude towards interest rates, emerging markets can still benefit from the inflow of funds. From a fundamental point of view, the rise in emerging stock markets this year is well-founded, as profit growth estimates are observed. According to the I/B/E/S survey (2/12), the market estimates that corporate profits in emerging markets this year can be Growth is 15%, while mature markets are only 12%. In addition, emerging stock markets have a discount of about 30% in terms of stock price to net value ratio or price-to-earnings ratio, causing capital to flow downwards and allowing emerging stock markets to return to the market. Capital embrace.
Franklin Securities Investment Consulting pointed out that according to data from the Federal Reserve Bank of New York, U.S. households’ inflation expectations for consumer prices have risen to the highest level since mid-2015, and German producer prices fell in January. The CPI surged 4% year-on-year, the fastest growth rate since October 2011. China’s CPI also rose 2.5% year-on-year in January, hitting a two-and-a-half-year high. The era of global inflation is returning, allowing managers to Overweight the energy and raw materials industries, and the overweighting of energy stocks has reached a new high since March 2012.
Overall, technology, banking, medical, energy and insurance stocks were the industry categories that managers were most optimistic about in February, reflecting managers’ expectations that long-term interest rates are expected to rise and regulations will be relaxed, which will benefit the financial industry. , as well as the innovative growth trends of technology and medical stocks.
Federico Furlong, manager of Franklin Templeton Natural Resources Fund, said that at the end of 2016, OPEC and some non-OPEC countries agreed to reduce production in the first half of this year, and assessed that the chances of both parties complying with the agreement are high. They have consistent interests to avoid another collapse in oil prices, which will once again impact the fiscal budget and foreign exchange reserves. However, withThe continued recovery in U.S. crude oil production may offset the effect of OPEC’s production cuts, which is why we expect the oil price range to move up to US$55-65 per barrel this year.
The expected growth in petrochemical energy production in the United States, along with increased drilling and extraction activities, will help oil and gas drilling and oilfield services and equipment stocks. In addition, the price of U.S. shale oil is about US$50 per barrel, and many of them are already profitable. If oil prices rise further, it will stimulate U.S. shale oil producers to resume production and fill the market share due to OPEC’s reduction in crude oil production. U.S. shale oil Oil will gradually gain the upper hand in the oil war with OPEC, which is also expected to benefit the profits and stock price performance of U.S. energy producers.
