Monetary policy divergence, needed structural reform
in many economies, declining oil prices and a strengthening U.S.
dollar cited as key topics for investors in 2015
TORONTO, Dec. 18, 2014 /PRNewswire/ -- Manulife Asset
Management has issued its annual "Year Ahead" report, which
highlights monetary policy divergence, the need for structural
reform in many economies, declining oil prices and a strengthening
U.S. dollar as key topics of interest to investors in 2015.
Drawing together the individual views from Manulife Asset
Management's investment and economic teams on the ground in the
U.S., Canada, Europe and in ten markets across Asia, the report addresses the outlook for 15
investment areas and asset classes - including fixed income,
equities, commodities and asset allocation.
Accompanied online by an interactive map showing global growth
and inflation forecasts as well as a video featuring Chief
Economist Megan E. Greene, the
report is available at: www.manulifeam.com.
"The year ahead is likely to see the global economy caught in a
tug-of-war between a modest recovery in the U.S. on one hand and a
slowdown in China and
low-to-no-growth in Japan and
Europe on the other," says Ms.
Greene. "We expect these competing influences to keep global growth
bumping along a baseline of around 2.5 percent."
Among the insights covered in the report:
- Monetary policy divergence – With the U.S. and UK likely
tightening, other major economies are likely to loosen monetary
policy or continue in a holding pattern. The timing of a U.S.
interest rate rise is uncertain but experts agree that it is
unlikely to happen until the second half of 2015 at the earliest,
and possibly may be delayed until early 2016.
- The need for signs of progress towards structural economic
reforms particularly in Japan, Europe
and emerging markets.
- Impact of a stronger U.S. dollar on global economies and
markets – A repeat is not expected of 2013's 'taper tantrum,'
which resulted in outflows from Emerging Markets and Asia.
Views from Manulife Asset Management's investment teams are also
quoted in the report:
- The Global Multi-Sector Fixed Income team outlines why
it will be important for Japan,
Europe and emerging countries in
Latin America to make progress
with needed structural reforms in 2015, in order to regain the
confidence of investors. The team believes we are in the midst of a
multi-year uptrend in the U.S. dollar and suggests it will be vital
for investors to understand the impact of this in the year
ahead.
- The Asian Fixed Income team provides a local perspective
from 10 bond markets in Asia on
why they will continue to focus on credit with relatively short
duration due to the potential for a rise in interest rates. The
team expects to be overweight carefully selected credit issuances
which offer higher spreads – including high yield credit – and
favor hard currency bonds in the year ahead.
- The Emerging Market Debt team explains why 2015 is not a
year for simply getting beta by accessing the market
indiscriminately. Rather, they advise focusing on discerning those
emerging markets that are likely to be the most resilient in the
current economic environment and to avoid weaker markets that may
struggle to push through the longer-term reforms needed to put
their economies on a surer footing.
- The U.S. Equities team believes U.S. equity returns
could be in the high single digits in 2015 if the economies of its
trading partners stabilize. They also explain why they see
particular opportunities in the U.S. financial, housing and energy
sectors.
- The Asian Equities team outlines the attractive
valuation opportunities in some Asian markets, notably South Korea and Taiwan. They find that many Taiwanese
companies have robust balance sheets and therefore are
well-positioned to pursue growth while at the same time maintaining
decent dividend pay-outs to shareholders.
- From the Global Natural Resources team, a view on oil
prices: If prices remain weak over a longer period the team expects
investment in future production to be curtailed as the average
supply cost for industry break-even is closer to $90 to $100 per barrel. Over the long run, the
team anticipates oil prices to range between $80-$100 to sustain investment to meet future oil
demand needs.
About Manulife Asset Management
Manulife Asset Management is the global asset management arm of
Manulife, providing comprehensive asset management solutions for
institutional investors and investment funds in key markets around
the world. This investment expertise extends across a broad range
of public and private asset classes, as well as asset allocation
solutions. As at September 30, 2014,
assets under management for Manulife Asset Management were
approximately C$309 billion
(US$276 billion).
Manulife Asset Management's public markets units have investment
expertise across a broad range of asset classes including public
equity and fixed income, and asset allocation strategies.
Offices with full investment capabilities are located in
the United States, Canada, the United
Kingdom, Japan,
Hong Kong, Singapore, Taiwan, Indonesia, Thailand, Vietnam, Malaysia, and the
Philippines. In addition, Manulife Asset Management has a
joint venture asset management business in China, Manulife TEDA. The public markets units
of Manulife Asset Management also provide investment management
services to affiliates' retail clients through product offerings of
Manulife and John Hancock. John
Hancock Asset Management and Declaration Management and Research
are units of Manulife Asset Management.
Additional information about Manulife Asset Management may be
found at ManulifeAM.com.
About Manulife
Manulife is a leading Canada-based financial services group with
principal operations in Asia,
Canada and the United States. Clients look to Manulife
for strong, reliable, trustworthy and forward-thinking solutions
for their most significant financial decisions. Our international
network of employees, agents and distribution partners offers
financial protection and wealth management products and services to
millions of clients. We also provide asset management services to
institutional customers. Funds under management by Manulife and its
subsidiaries were approximately C$663
billion (US$591 billion) as at
September 30, 2014. Our group of
companies operates as Manulife in Canada and Asia and primarily as John Hancock in the
United States.
Manulife Financial Corporation trades as 'MFC' on the TSX, NYSE
and PSE, and under '945' on the SEHK. Manulife can be found on the
Internet at manulife.com.
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SOURCE Manulife Asset Management