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Special Report

East v West - December 2012

Published by Investment Adviser | Dec 03, 2012

The US has enjoyed its status as the world’s biggest economy for more than 100 years.

But times are changing, and in November the OECD stunningly predicted that China would overtake the US to become the world’s biggest economy by 2016. It also predicted that India would overtake the US in the longer term, and that China was set to overtake the eurozone in terms of economic scale by the end of 2012.

The savvy investors among us, then, are already asking whether their money should still be heavily invested in the old industrialised economies of the West, or whether the East represents the future for those looking to secure their wealth in the coming decades.

Of course, sensible investing is about more than simply allocating all your capital to economies with the fastest rates of growth.

What about China’s inconsistent corporate governance standards? What happens if a nation of more than 1.3bn individuals decides it doesn’t want to live under single-party, pseudo-communist rule any more?

And what if the West, which after all invented the entire concept of industrialisation, pulls its own rabbit out of the hat and through sheer innovation and productivity retakes the lead in global growth terms?

These are the questions that investors are grappling with, and that’s why we’ve teamed up with Neptune to bring you this special supplement edition of Investment Adviser focusing on the battle between the East and the West.

Inside we’ll consider how China’s recent leadership change could affect the investment outlook and we’ll look at reforms in India that could spell a brighter 2013. We’ll examine the situation in Japan and ask whether it really can one day escape the ‘negative feedback loop’ that imprisons it.

We’ll also examine the debt-laden West, which is paying the price for years of cheap credit and government spending excess. Is Europe facing its own lost decade? Will the US’s looming fiscal cliff wipe 4 percentage points off the nation’s economic output?

We may not have all the answers, but we promise to bring you a good selection of lively and relevant information to help you on your way.

I would like to add a special welcome to new readers. In addition to regular supplements exploring relevant investment issues, Investment Adviser also produces a weekly magazine for investment professionals featuring a full selection of news, comment, interviews, features, fund reviews and fund performance statistics.

This year we have redesigned the magazine, added more staff and launched our very own event series – the Investment Adviser 100 Club of outperforming funds. In November we were awarded the IMA’s Team Award for Excellence in Investment Writing 2012.

If you are interested in signing up for a free subscription to the magazine please visit www.FTAdviser.com/iasubs to apply.

John Kenchington is editor of Investment Adviser

IN THIS REPORT
  1. Mena frontiers are going strong – for now

    The Middle East and North Africa (Mena) region has seen strong growth, but how long will this last?

  2. A battle with debt continues to drive markets

    Dealing with debt continues to drive the markets in the West.

  3. North America most popular western fund peer group

    The IMA North America sector is the most popular western fund peer group.

  4. The UK’s biggest risks

    Volatile growth and inflation are UK’s biggest risks.

  5. The eurozone ‘remains a thorn in investors’ side’

    Europe has been the death of any recovery we might have hoped for from this long recession.

  6. UK real estate income ‘could plunge by 30%’

    Current relative yields suggest the market expects income from real estate portfolios to fall by 30 per cent in the years ahead.

  7. 2013 looks to offer better potential for India

    It has been a difficult year for India, but reforms should mean a brighter 2013.

  8. Signs of upward momentum in China

    The latest figures show signs of upward momentum in China’s economy.

  9. Asia Pacific outperforms counterparts

    Over both the long and short term, the MSCI Asia Pacific ex Japan index has outperformed its counterparts.

  10. The ones to watch

    Which markets will next be marked as the ones to watch?

  11. China’s new leader faces many crucial challenges

    Many investors are expecting fresh stimulus to accompany the leadership change China.

  12. A mixed global outlook for now

    The baseline forecast for global GDP growth in 2013 is 3.6 per cent, but most of this appears to be driven by the emerging markets.

  13. Will the much feared fiscal cliff actually happen?

    The US election is now complete but major challenges and questions remain.

  14. The US is still trying to get back on its feet

    There is an image that the US is in industrial decline, but the real picture is much more uplifting.

  15. The global view: where to invest for 2013

    It is expected that the global economic outlook will continue to be difficult.

  16. Japan has yet to find its way back to strong growth

    With an election looming, a change in leadership could give the Japanese economy a way back to strong growth.

  17. China leads as emerging markets continue to grow

    Eemerging markets have become the main drivers of expansion.

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