Mid-Year Update: Fidelity’s Greetham says market dips could present buying opportunities ahead of a stronger performing 2011
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- Good buying opportunities in 2H ahead of a stronger performing 2011
- Neutral equities, moderate overweight property and government bonds and underweight commodities
- Positive tilt on US, Asia and Emerging Markets, and Consumer, Technology and Healthcare equities
Hong Kong, 29 June 2010 – Market dips during the second half of 2010 will present solid buying opportunities ahead of a much stronger performing equities market in 2011, said Trevor Greetham, Fidelity International’s Director of Asset Allocation today.
Speaking at a live webcast in Hong Kong from London, Trevor said he had sold equities and commodities for the first time in 12 months because he believes conditions for equities will be more appealing in the second half of the year, ahead of a strong rally in 2011.
“I have trimmed down the large overweight equity positions in our multi-asset funds with a view to possibly buying dips later in the year,” he said. “Stocks tend to underperform bonds until lead indicators trough and this is unlikely to happen before late 2010 or early 2011 given the usual ebb and flow of the inventory cycle.”
“Valuations are still good and I believe there will be good buying opportunities later in the year so investors who missed out on the first leg of the bull market may find themselves presented with attractive entry points in the coming months.”
“Whilst the pace of the recovery will slow into 2011, global growth remains strong and I believe we are unlikely to see a double-dip recession. There will be a number of attractive entry points for investors in the second half of 2010 and I am optimistic about 2011, so watch this space,” he said.
Trevor said the massive stimulus pumped into the world economy over the past year has been effective and a strong V-shaped recovery in global growth is already underway.
“In 2011, I expect a new up-leg in stocks and commodities with two plausible catalysts for renewed strength. Firstly, central banks may unleash fresh quantitative easing to offset the slowdown in growth and tighter fiscal policy. And secondly, inflation hedges are looking good for the longer term and real assets like commodities and property should do well over the next several years as central banks monetise debt,” he explained.
Trevor’s Fidelity Funds – Multi Asset Navigator Fund is currently neutral equities, moderately overweight property and government bonds, and underweight commodities. “With respect to equities, I am overweight Asia, US, emerging markets and underweight the Eurozone. At the sector level, I have a positive tilt on consumer, technology, healthcare and I’m underweight industrials and financials,” he said.
About Fidelity International
Fidelity International is an affiliate but separate company to Fidelity Investments and provides investment products and services to individuals and institutional investors outside of the Americas. Fidelity International has been in Asia for 41 years with offices in Japan, Korea, Australia, Hong Kong, Taiwan, Singapore, China. Fidelity International manages US$215.9billion Assets Under Management (as at 31 March 2010), has over 6 million customer holdings and manages 937 funds. Fidelity International has one of the largest proprietary research teams in the world, providing insights into around 98% of the world's stock markets (as measured by the Morgan Stanley Capital International World Index, 4 June 2010). In Hong Kong, Fidelity is the largest provider of the ORSO (Occupational Retirement Schemes Ordinance) Member Choice Defined Contribution Scheme and is also one of the top ten MPF (Mandatory Provident Fund) scheme providers in Hong Kong.
Tel: 852 2629 2800
Tel: 852 2629 2800
.Source: Towers Watson Manager Watch, as at 31 March 2010.
.Source: Towers Watson MPF Performance Book, as at 31 March 2010.
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