Modified rapture seems to be the name of the game as 2009, a year of highs and lows, draws to close.
“Evidence
suggests the European economic recovery is underway,” says Gary Clarke,
head of European equities at Schroders, nicely catching the sober
trend. “Following aggressive cost cutting, European companies are well
positioned to deliver positive earnings growth in 2010 and European
valuations are not looking stretched. However, public sector debt and
rising unemployment may act as headwinds.”
Looking globally,
HSBC takes an even more subdued tone. “As consumers and governments
continue to pay down excessive debt levels, we believe unemployment
will add a further check to consumer spending growth,” says the bank.
Uncertainty on the strength and sustainability of recovery should keep
pressure on volatility levels in 2010.”
Meanwhile, Brian Rogers,
chairman and chief investment officer, T. Rowe Price, reminds us that
when bubbles burst, it’s critical to remember that “This, too, shall
pass.” However, he also cautions that: “There is another bubble waiting
for us somewhere down the road. We don’t know what it will be and when
it will burst, but we all need to be aware that bubbles do not continue
to expand indefinitely.
And what of emerging markets? Jerome
Booth, head of research at Ashmore Investment Management says they’re
starting to look like a safe haven.
“Given the risk of a double
dip and further sharp deleveraging, emerging market (multi-country)
asset classes are arguably now safer than their equivalents in
developed countries,” Booth comments. “Emerging countries have a wide
range of policy tools to cope with further external shocks or other
economic problems.”
Well, we shall see.
To end on a high
note, our number-crunching friends at Lipper FMI report the largest
inflows since April 2009 in their December statistical analysis, which
is based on October data. Total net flows reached €35bn, with €28bn of
that money going into equity and bond products. The group with the
largest flows was BlackRock – quelle surprise – and commodity funds
registered the most interest.
Finally, let’s hear it for the
fund of the decade. Russia’s been up and Russia’s been down, but those
enterprising Swedes at East Capital ended the decade ahead. The East
Capital Russian Fund is fund of the decade according to table compiled
by Morningstar having returned 1,523% in US dollar terms- 561% more
than its nearest rival.
Happy, Good New Year!
Fiona Rintoul, Editorial Director
©2009 Funds Europe
