An Opportunity on the Horizon for Global Equities
After a difficult 2022, many investors want to hear about what can expect in the year ahead.
Hear from our global equity investment specialists as they discuss what influenced global equity market performance over the past year, their expectations for a recession, and why they anticipate a market recovery beginning in the second half of 2023.
Here are a few high-level highlights:
Blair Setford
Vice-President Product Management
IPC Portfolio Services
Our investment specialists are entering 2023 with both concern and optimism. Central bank efforts to curb inflation are beginning to take hold. The main concern for many at this point in the rate cycle is whether the Fed will make a policy error by hiking rates too far for too long. While an ongoing concern, the consensus amongst our investment specialists suggests we should expect a mild recession in the first half of 2023 that should prove to be short-lived.
Looking forward, we expect our portfolios to return to either neutral or overweight positions in equities in the second half of 2023. Fixed-income markets are looking good and will regain their ability to buffer portfolios from the excesses of the equity markets in the coming year. Investors will need to be patient as the markets continue to work through the fallout from today’s inflationary environment while remaining well-positioned for a new phase of growth beginning in the second half of 2023.
Brandon Harrell
TSW
Mandate: International Value Equities
TSW believes that valuations are currently attractive across the board but there are headwinds ahead in the form of central bank tightening, a potential recession, and slowing corporate profits. Brandon feels these issues are well known and likely already priced into the markets. He believes now is a good time to focus on fundamentals and individual security selection to lay the foundation for the next 3-5 years. Currently excited about European banks.
Ken Applegate
Wasatch Global Investments
Mandate: Global Small-Cap Equities
For Wasatch, the focus for 2023 is on active management as they are very enthusiastic about the outlook of small-cap equities despite more immediate economic concerns. While small-cap equities were one of the worst performers in 2022, Ken expects that history may repeat itself where small caps excel as an asset class the following year. Ken is currently excited about Japanese companies where improved corporate governance and growing reinvestment look to support strong earnings growth going forward.
Corrado Russo
Hazelview Investments
Mandate: Global Real Estate
After a difficult period for global real estate that began with the COVID pandemic, Hazelview is optimistic about 2023. For publicly traded real estate, a combination of supply issues, growing income, and cheap valuations suggest that the current environment represents the biggest opportunity in decades for this sector, despite ongoing uncertainty about the global economy over the near term.
