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Guide to macro-economics and investment portfolios

    Guide to macro-economics and investment portfolios


    There are a wide variety of ways in which managers can use macro-economic views and how they go about obtaining these outlooks.

    Some thematic strategies invest entirely on the basis of macro-economic views aiming to generate an excess return for investors for these themes.

    This can be hard as it may be difficult to link a theme to investments that benefit from an outlook.

    Others utilise macro-economic views to inform their risk controls.

    Stock pickers or bottom up investors may incorporate their macro-economic views into their analysis of individual stocks and bonds.

    Macro-economic views can be particularly important for asset allocation, but must be incorporated with an assessment of valuation in order to be useful.

    For example, a fund manager may correctly predict that inflation is going to fall, but if it is already reflected in the price of an asset class then there is no benefit to buying that asset to protect from a fall in inflation.

    This guide will look at how outlooks can be obtained, what impact macro-economic views should have on your client’s portfolio and how to make sure your client understands the way these views shape their investments.

    Contributors of material to this guide are; David Pages, senior economist at Axa IM; Anna Stupnytska, global economist at Fidelity Worldwide Investment; Emiel van den Heiligenberg, head of asset allocation at Legal & General Investment Management; Peter Rutter, global equities manager at Waverton Investment Management; Eric Clapton, managing director of Wellian Investment Solutions; James Spence, managing partner of Cerno Capital; and Hannah Sharman, head of investment sales at Cerno Capital; and Louis Coke, senior investment manager at Charles Stanley.

    In this guide


    Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

    1. How many themes are likely to shape the global macro landscape in 2015, according to Ms Stupnytska?

    2. Who is “less appropriately served” by a manager with a pro-cyclical macro-view, according to Mr Rutter?

    3. What does Waverton Investment Management believe about the 2015 economic recovery?

    4. What is the most naive technique to get a macro-economic outlook, according to Mr van den Heiligenberg?

    5. Is one single method of forming a macro-economic view correct, according to Ms Stupnytska?

    6. Who should take a macro-economic view in Mr Coke’s opinion?

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