The Fisher Investments ESG Perspective Newsletter is published seasonally with the goal of keeping the investment community abreast of our various ESG capabilities and projects. 2019 marked a big year for ESG at Fisher Investments. We launched our first impact portfolio-aligned with the UN Sustainable Development Goals, hired an industry expert on corporate engagement & responsibility, continued pushing data boundaries throughout our proprietary ESG research and started exploring ways to make our operations more sustainable.
We expect 2020 will be a moderately positive year for equities. Sentiment is still not euphoric, yet continues to improve as 2019’s big fears did not materialize. A Goldilocks economy is emerging from a mid-cycle slowdown, while political uncertainty should peak early then fade through the U.S. presidential election.
Long, flat periods followed by gains have been a hallmark of this bull, which should continue with volatility into 2020.
We expect the market to continue accelerating in this bull’s final third – albeit at a slower pace in the second half of the year – on the back of post-correction highs.
Fisher Investments (FI) utilizes a unique combination of top down and bottom up investment process where ESG risks and opportunities are regularly evaluated to determine potential impact on portfolio macro themes, country/sector allocation, and stock selection.
Equities have rebounded strongly from 2018’s lows, demonstrating a V-shaped recovery associated with prior corrections. We expect equities to accelerate through the bull market’s final third.
2018’s market decline was driven more by fear than fundamentals, a classic characteristic of corrections which typically feature strong V-shaped recoveries. We expect the bull market to resume selling pressure from the end of 2018 to ease and corporate and economic fundamentals remain solid.
We are currently overweight to European Financials in our global portfolios. Despite recent sentiment-driven underperformance, we expect strong performance going forward. Asset quality, real estate prices, loan growth, LEIs, the yield curve and the end of QE support a healthy future. Overblown trade and political fears have weakened sentiment for European Financials, setting the floor for positive surprises.
The paper was prepared in light of shifts within our Emerging Markets Equity portfolio which increased our overweight to Latin America. Further, the paper discusses the firm’s views to the unfolding political events in Brazil and Mexico at the time of writing.
With US midterm elections on the horizon, we expect the bull market to continue as investors begin to appreciate underlying fundamentals and fears of a trade war and Eurozone breakup dissipate.
Turkey’s challenges today are driven by years of economic mismanagement and President Recep Tayyip Erdogan’s actions following his recent consolidation of power.
Inflation and trade war fears are overblown and we expect the bull market to continue accelerating upward.
Despite Q1’s pullback, we expect the bull market to continue. The global economy is in full expansion mode while corporate earnings growth remains strong.
Trade speculation dominated Emerging Markets headlines in March. US President Donald Trump announced plans to levy 25% tariffs on about $50 billion worth of imports from China as well as adopt new restrictions on Chinese investment in the US.
Political uncertainty continues falling for two of the Eurozone’s biggest economies: Germany and Italy. Germany has a new government, a reboot of the “Grand Coalition” between Angela Merkel’s Christian Democratic Union (CDU) and the center-left Social Democratic Party (SPD).
Trade war and Tech regulation fears largely replaced inflation worries during the month, conspiring to drive the S&P 500 down 2.5% in March and retest the correction’s low before regaining some ground in the month’s final week.
Europe is early in its credit cycle with positive momentum in economic drivers and underappreciated balance sheet strength, which should allow most European Banks to accelerate credit growth with improved profitability for at least the next few years.
As the largest economy in Eastern Europe with a strong economic relationship with developed Europe, Poland offers broad exposure to the European market.
The British people have officially voted to leave the European Union (EU). While Scotland, Northern Ireland and London supported remaining in the EU, Wales and the remainder of England overwhelmingly voted to leave. At final tally, 52% voted “Leave” versus 48% “Remain”. This piece breaks down the intricacies of the Brexit decision and analyses the variables behind the uncertainty clouding the markets.
In the Q1 2016 earnings season, some department stores reported weaker-than-expected results with news of declining sales and profits. Media was quick to dramatize the reports with cries of a US “retail recession” and assertions that the consumer is tapped out —all bad signs for US growth looking forward. However, in this piece, we would humbly suggest that is incorrect.
A summarized analysis that puts EM corporate debt into perspective and reveals the portion denominated in USD.
Fisher Investments Europe was established in London, England in 2000. Fisher Investments Europe offers the portfolio management services of its parent company, Fisher Investments, an independent money management firm in the US founded in 1979 by investment guru Ken Fisher. Today, Fisher Investments and its affiliates oversee more than £91 billion* in assets for over 68,000 private clients and 150 institutional clients globally.* Founder Ken Fisher’s “Portfolio Strategy” column for Forbes ran from 1984 through 2016, making him the longest continually running columnist in the magazine’s 90+ year history. He has also authored several New York Times bestsellers on finance and investing. (*As of 31/12/2019. Includes assets under management of Fisher Investments, its subsidiaries and affiliates.)