Investment Strategy Paper
Download ISP - June 2011
ISP executive summary
The economic recovery in the United States has hit another soft patch. This serves as a reminder of the difficult nature of the recovery. We believe the recent weakness will prove transitory, however we continue to expect no tightening in monetary conditions in the US this year.
Debt issues in Europe continue to be a key focus for markets. Greece continues to be the centre of attention, although there is also renewed concern about Portugal in particular. The problem continues to be exacerbated by political procrastination. The simple fact remains that there is no easy answer to the problem.
Growth in China is also slowing, with GDP growth of 9.0% expected this year. Together with a weaker outlook for the US, the disruption to global supply chains from the devastating Japan earthquake and fiscal consolidation having a constraining effect on growth in other key developed economies, we now see global growth of 4% in 2011. This is down from 5% in 2010.
Over the last six months or so we have been busy changing the mix of our diversified portfolios. Following a period of strong performance for growth assets, from late last year we began to take profits and reinvest funds into more defensive assets. This has proven to be a profitable strategy, as market conditions have recently become more challenging.
Our portfolios are now neutral on the growth/income split. Our overweight to global equities is offset by slight underweights to commodities and global property. We are slightly overweight NZ listed property and underweight NZ equities. We are neutral across the income mix of cash, NZ bonds, and global bonds. We are short the NZ dollar overall, especially against the USD and Sterling, and we have a long NZ dollar position against the Australian dollar.
Download AXA Global Investers Quarterly Investment Strategy Paper - June 2011
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For further information please contact:
Ralph Little, Spicers Public Relations
Telephone: 09 374 1845
Email: ralph.little@spicers.co.nz