House View Q4 2016
Aviva Investors expects the global economy to move in a more reflationary direction.
We expect global economic growth to pick up gradually, with inflation also set to rise, albeit from historically low levels. With global monetary policy likely to remain accommodative, and fiscal policy expected to take a more significant role, the world is expected to head in a more reflationary direction.
These views are described in more detail in our latest quarterly House View document, which encapsulates the thinking of our investment professionals across asset classes. The report outlines global macroeconomic prospects, identifies the key themes that will frame investment decision-making over that period and underscores the main risks. It also considers the implications of those views across a range of markets.
This year has been characterised by ever more global monetary stimulus. That has provided a boost to many asset classes, despite the various risks that have materialised. We expect that as global reflation rises, the prospects for fixed income markets, in particular, become more challenging.
Looking forward, the US is expected to raise interest rates slowly, while other central banks are reaching the end of the road for additional policy stimulus.
Worries about growth in China have fallen during 2016, while recoveries in Europe and the US have continued, albeit at a modest pace. The fallout from the UK’s ‘Brexit’ decision, as well as upcoming political events including the US presidential election, the Italian constitutional reform referendum and a number of important European elections, have the capacity to upset financial markets. Politics has played, and will continue to play, a key part in investment decisions. The growth of nationalism, rising inequality and a sense of injustice among electorates are themes that look set to continue.
The UK has embarked on a long and potentially bumpy road to EU exit. Growth will be negatively impacted and the inevitable extended period of uncertainty will be a difficult backdrop for households, companies and financial markets.
Japan is at a critical juncture, with the Bank of Japan reshaping its policy framework in a way that points to a closer relationship between monetary and fiscal policy in future. The country could yet set a new benchmark for unconventional policy stimulus that others may follow.
Download the House View
The Aviva Investors House View document is a comprehensive compilation of views and analysis from the major investment teams.
The document is produced quarterly by Aviva Investors investment professionals and is overseen by the Investment Strategy team. The House View document serves two main purposes. First its preparation provides a comprehensive and forward-looking framework for discussion among the investment teams. Second, it allows us to share our thinking and explain the reasons for our economic views and investment decisions to those whom they affect.
Unless stated otherwise, any sources and opinions expressed are those of Aviva Investors Global Services Limited (Aviva Investors) as at 30th September 2016. They should not be viewed as indicating any guarantee of return from an investment managed by Aviva Investors nor as advice of any nature. Past performance is not a guide to future performances. The value of an investment and any income from it may go down as well as up and the investor may not get back the original amount invested. Some of the information within this document is based upon Aviva Investors estimates. It is not to be relied on by anyone else for the purpose of making investment decisions.
The information provided in this document and any appendices is confidential and should be used only for the purposes requested. Any material cannot, wholly or partly be copied, reproduced or provided to a 3rd party without the express consent of Aviva Investors.
Unless stated otherwise, any sources and opinions expressed are those of Aviva Investors Global Services Limited (Aviva Investors) as at 30th September 2016. They should not be viewed as indicating any guarantee of return from an investment managed by Aviva Investors nor as advice of any nature. The value of an investment and any income from it may go down as well as up and the investor may not get back the original amount invested. Some of the information within this document is based upon Aviva Investors estimates. It is not to be relied on by anyone else for the purpose of making investment decisions.
Nothing in this document is intended to or should be construed as advice or recommendations of any nature. This document is not a recommendation to sell or purchase any investment. It does not form part of any contract for the sale or purchase of any investment.
Any forward-looking information contained herein is subject to certain inherent limitations. Such information is information that is not purely historical in nature and may include, among other things, proposed or target portfolio composition, specific investment strategies and forecasts of future market or economic conditions. Any forward-looking information contained herein is based upon certain assumptions, which are unlikely to be consistent with and may differ materially from, actual events and conditions. In addition, not all relevant events or conditions may have been considered in developing such assumptions. Accordingly, actual results will vary and the variations may be material. Prospective investors should understand such assumptions and evaluate whether they are appropriate for their purposes. This document may also contain historical market data; however, historical market trends are not reliable indicators of future market behaviour. Aviva Investors is not under any obligation to subsequently update this information.
The information contained on this document is believed to be accurate and current at the time of compilation and is provided in good faith. Aviva Investors does not accept any responsibility arising in any way (including negligence) for errors in or omissions from information contained in this document or for any loss or damage (whether direct, indirect or otherwise) suffered by the recipient of the information contained in this document, or any other person.
The information contained in this document should be used as general information only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before relying on any information contained in on this document, you should consider whether the information is appropriate to your particular objectives, financial situation and needs and obtain professional financial, taxationand legal advice.
Prepared by Aviva Investors Global Services Limited, registered in England No. 1151805. Registered Office: St. Helen’s, 1 Undershaft, London EC3P 3DQ. Authorised and regulated in the UK by the Financial Conduct Authority and a member of the Investment Association.
This document is being circulated by way of an arrangement with Aviva Investors Asia Pte. Limited and its subsidiaries Aviva Investors Securities Investment Consulting Co., Ltd. and Aviva Investors Pacific Pty Ltd (“Aviva Investors Asia”) for distribution to investment professionals only. Please note that Aviva Investors Asia does not provide any independent research or analysis in the substance or preparation of this document. Recipients of this document are to contact Aviva Investors Asia in respect of any matters arising from, or in connection with, this document.
Aviva Investors Asia Pte. Limited, a company incorporated under the laws of Singapore with registration number 200813519W, holds a valid Capital Markets Services Licence to carry out fund management activities issued under the Securities and Futures Act (Singapore Statute Cap. 289) and is an Exempt Financial Adviser for the purposes of the Financial Advisers Act (Singapore Statute Cap.110). Registered Office: 1 Raffles Quay, #27-13 South Tower, Singapore 048583.
Aviva Investors Securities Investment Consulting Co., Ltd., a company incorporated under the Company Law of the Republic of China with registration number 53097616, holds a valid Securities Investment Consulting Enterprise (SICE) License to carry out Securities Investment Consulting Service and other relevant business permitted by Financial Supervisory Commission, Executive Yuan, R.O.C. and provides permitted liaison and coordination services only. Registered Office: Room D-1, 24F, No. 7, Section 5, Xin Yi Road, Taipei 110, Taiwan.
Aviva Investors Pacific Pty Ltd, a company incorporated under the laws of Australia with Australian Business No. 87 153 200 278 and Australian Company No. 153 200 278, holds an Australian Financial Services License (AFSL 411458) issued by the Australian Securities and Investments Commission. Business Address: Level 50, 120 Collins Street, Melbourne VIC 3000, Australia.