From The World’s Top 5 Asset Management Companies
As a new decade dawns, we here at Meredith Charles are beginning to look towards a new year of fixed income investment opportunities. With our minds focused on high returns in 2020, we are keen to pre-empt any challenges that investors may face in the year ahead.
To give us some additional insight into the investment market landscape in 2020, we’ve examined the predictions from the world’s top 5 asset management companies who had a combined asset management portfolio of over 20.8 trillion US dollars in 2019. We have focused specifically on the investors global outlook and fixed income as is more relevant to the products we sell at Meredith Charles.
The largest alternative investment firm in the world, BlackRock has been operating since 1988 and specialises in private equity, credit and hedge fund investment strategies. In 2019, BlackRock managed assets to the amount of 6.8 trillion US dollars.
BlackRock’s 2020 outlook:
“We expect a modest global growth pickup in the first half of 2020. This limits recession risk and is a favourable backdrop for risk assets, in our view.”
BlackRock’s views on fixed income:
“We have upgraded global high yield, supported by stable monetary policy and the prospect of a growth inflexion. Spread widening, especially in lower-rated cohorts, has offered an entry point.”
The second-largest asset management company in the world, The Vanguard Group was established in 1975 and offers brokerage services, variable and fixed annuities, educational account services, financial planning, asset management, and trust services. In 2019 The Vanguard Group had over 5.6 trillion US Dollars in assets.
Vanguard’s 2020 outlook:
“As global growth slows further in 2020, investors should expect periodic bouts of volatility in the financial markets, given heightened policy uncertainties, late-cycle risks, and stretched valuations.”
Vanguards views on global on fixed income:
“We expect fixed income returns to be lower given the decline we've seen in yields over the past year, but high-quality bonds will remain a key portfolio diversifier.”
UBS prides itself as having a presence in 22 countries and offers equity, fixed income, hedge funds, global real estate and private equity investments. In 2019, UBS managed assets to the value of 3.2 trillion US dollars.
UBS’s 2020 outlook:
“The global economy stands at an important late-cycle inflexion point. But late cycle does not mean end cycle. We continue to view short-term recession fears as overdone. Rather, we expect a moderate growth reacceleration in early 2020 as geopolitical risks abate, China’s growth slowdown stabilises and as the lagged impact of looser monetary policy globally feeds through to demand.”
UBS’s views on global on fixed income:
“Investors targeting a given level of return in well-diversified portfolios may need to increase their allocation to riskier assets such as equities and reduce their allocation to assets like bonds. Equally, investors targeting a given level of risk may need to accept lower, or even negative, returns as a necessary price of that safety.”
On the 22 January 1993, State Street launched the first exchange-traded fund (ETF) in the US. State Street manages assets for businesses, corporations, associations, governments, educational institutions, non-profit foundations and religious organizations. Their Global Advisors have control of assets worth 2.8 trillion US dollars.
State Street Global Investors 2020 outlook:
“We believe that the global economic recovery will continue in 2020, although it may have to sidestep substantial risks to sustain momentum. Those risks notwithstanding, renewed monetary policy support and resilience in consumer spending and services should help to propel the cycle forward.”
State Street Global Investors views on fixed income:
“We believe that the structural trend is toward lower rates, the news and economic cycle will introduce volatility to the trend, creating opportunities to trade this range.”
Fidelity Investments was established in 1946 and operates a brokerage firm and offers fund distribution, investment advice, retirement services, Index funds, wealth management, cryptocurrency, securities execution and clearance. In 2019 had 2.7 trillion under management.
Fidelity Group’s 2020 Outlook:
“After a year of renewed monetary policy expansion, we expect the world to avoid a global recession in 2020. We expect sustainability to remain a core theme across the corporate landscape in 2020.”
Fidelity Group’s views on fixed income:
“We think the outlook for fixed income in 2020 is positive, driven by the dovish policy environment and the potential de-escalation in the US-China trade conflict. Amid low core bond yields, expect further inflows into higher-yielding areas such as emerging markets; but be wary of EM currencies.”
Meredith Charles view
Interestingly, many of the top five believe a recession will be unlikely in 2020. Although they predict the fixed-income market will face challenges, many have identified opportunity in far east emerging markets.
Following the recent conservative victory in the general election, there is early evidence that investors are now more stable than before. Our analysis of the 2020 outlook from the world top 5 asset manages leads us to believe that investors who take a pragmatic approach to 2020 should do well.
On another note, our premium investment opportunity Pardus-Fixed Income Bond is expected to be resilient to any of the forecasted challenges in the year ahead. As a risk-adjusted unregulated bond, we believe that PARDUS remains a great investment opportunity in 2020 for individuals looking to expand their diversified investment portfolio.
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The views expressed in this article are those of Meredith Charles. They should not be considered as advice or recommendation to buy, sell or hold a particular investment. They reflect our personal opinion and should not be solely relied upon when making investment decisions. Please read our Terms and Conditions page for more information.