Lorenzo Bombarda, Banor Capital’s investment manager, is quoted by Barometro Advisor on the commodities underestimation.
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The Great Challenge
China, Greece and the Fed are turning the markets upside down. But fund managers are taking countermeasures. China, Greece, the Fed, raw materials, geopolitics. Fund managers have plenty of variables to deal with between now and the end of the year, but they say they’re ready to face the major challenge of the new markets. A test that is pushing the traditional “fundamentals” into the background.
There is no lack of unknowns from here to the year’s end: China, Greece, the Fed, commodities. Yet fund mangers, while fully aware of the increased volatility expected in the last quarter of 2015, seem to share an underlying optimism that allows them to view the glass as half full. Especially when we’re talking about stock markets. Topping the managers’ list of favourites are Europe and Japan. These are some of the results that emerged from the special edition of ADVISOR’S “Barometer” feature. An edition in which we asked a selection of managers what were the main risks they envisaged between now and the end of 2015? And which asset classes would benefit in coming months from a bullish (or bearish) period? [Note: the ADVISOR/Barometer article includes comments by numerous advisors; this extract features the views of Banor Capital’s Lorenzo Bombarda, below]. Fund managers’ view may differ, but on one point they all seem to agree: 89% say that for investors looking to place their bets on shares, Europe is best. And before the end of 2015 the Fed will raise interest rates, with an inevitable increase in volatility and a new era in the market. A major challenge for fund managers will be the need to keep fundamentals firmly in sight under the crossfire from political decisions and the central banks.
COMMODITIES STILL UNDER-VALUED
Europe will continue to grow on the strength of quantitative easing and the solution to the Greek crisis, and we think there’s still a lot of value to be extracted from investments. We’re following the Italian market closely, given that many securities still have favourable evaluations, notwithstanding the notable growth of the index since the start of the year. On the Chinese front, in response to the recent volatility of the stock markets, which to some degree shook investors’ confidence – Chinese and otherwise –, a large number of important reforms are expected. The government’s intention is that these will provide a new impetus to consumption and investment. Lastly, it looks like commodities will continue to be undervalued for some time.
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