There is uncertainty about whether 2015 will be a good year for investors, especially given the situation in Europe, a panel of industry experts has said.
Simon Murphy, a fund manager with Old Mutual Global Investors, Andy Brough, co-head of Schroders’ pan-European small and mid-cap team, and Chris Kinder, portfolio manager at Threadneedle Investments, were taking part in a panel discussion at a conference organised by Rayner Spencer Mills Research in Harrogate.
Mr Kinder told the audience the UK economy faced good news and bad news.
He said: “The good news from the UK perspective will probably be the fact that you may see a bit of disposable income growth for the first time in a few years.
“But that doesn’t adjust the serious structural issues in the economy around indebtedness and the government’s fiscal position.
“As an investor I am not so worried about the economy, more about the value of the underlying stocks.”
Mr Murphy agreed: “Economically we are going to be fine. From a stock-market perspective I am being cautious.
“I had expected 2014 to see growth picking up a bit and that we would be a bit more certain about interest rates.
“I expected to be more optimistic, but as I sit here today we have got issues around the eurozone and earnings have been disappointing.”
The Bank of England’s monetary policy committee has held interest rates at a record low of 0.5 per cent since March 2009 to help economic recovery.
A rise in interest rates had been widely anticipated early next year but the panel expressed doubt about whether this would happen at all in 2015.
Mr Brough said many companies were still finding it hard to increase their revenues, with only housing and oil sectors doing well.
He said: “It has been very hard for companies to grow their top line. The government is finding it very hard to grow its top line, and its top line is tax.
“Next year you want to stay away from any companies that are dependant on the government because there is a real storm coming.”
RSMR organised the conference to mark the Yorkshire-based company’s 10th birthday.
It was followed by an award ceremony for fund managers, with the winners chosen by advisers.
Gavin Haynes, managing director of Bristol-based Whitechurch Securities, said: “We are broadly positive about next year.
“Our view is that valuations don’t look stretched in the UK equity market and we do see opportunities.
“We think interest rates are likely to remain low for longer, and any increase is likely to be towards the back end of next year and likely to be marginal so it won’t be of material interest.”