History suggests that equities struggle to make gains ahead of US mid-term elections. With anti-trade rhetoric likely to feature in this autumn’s campaign, this time is unlikely to be different. On the other hand, we have also learnt to be prepared for the opposite with President Trump.
Traditional models suggest that there is a very high chance equities outperform over the long term. But are they overconfident, and should long-term investors adjust their asset allocation accordingly? Let's consider this question from one particular technical angle.;
The active versus passive debate consistently generates conflicting advice. The potential for active managers to side-step a falling market is one frequently cited factor. But have regional equity funds actually outperformed their respective indices during market corrections?;
I have a confession to make: I’ve never been the biggest fan of the British takeaway. I realise, however, that based on industry data I’m clearly in the minority. In the era of platform economies, global food aggregators such as Just Eat and Deliveroo have risen to meet the demands of the great British appetite. This is driving considerable change in consumer behaviour and potentially offers tasty returns for investors in the process.;
On some indicators equities look expensive – the CAPE ratio is the highest since the dot.com boom. But with interest rates at multi-decade lows, shouldn't equity earnings yields be low too? Rising interest rates pose a threat to valuations, but models suggest this could be offset as long as recession fears remain low.;
ESG and long-term themes
How could investors not like technology stocks? They’re cool companies, led by charismatic CEOs making irresistible products. And what's more, they're posting amazing growth rates with stocks that just keep going up. I’m sure the bottom-up investment case is much more sophisticated than that, but today I want to lay out the strong macro case for tech stocks.;
It will come as no surprise that the food retail industry is rapidly evolving, especially in the area of automation. A few months ago, I attended Redburn’s “The Incumbents’ Response” food retail conference, which provided a fascinating insight on the threat of disruption. It was evident that access to advanced technology and logistics platforms are key to shaping future success. One company driving this move is Ocado.;