We asked the managers of three Omnis sector funds to give their views on the year ahead, with regard to the UK, the US and fixed income markets.
Starting with the domestic market, Neil Woodford of Woodford Investment Management, and manager of the Omnis Income & Growth Fund, insists we should look beyond the “gloom” around Brexit.
Neil believes investors are far too bearish on the UK economy. He predicts the economy will grow by around 2% this year (GDP), with inflation coming down significantly from its current 3% level (CPI as at December 2017), and real wage growth returning. By implication, he believes that those listed companies exposed to the “slings and arrows” of the UK economy will do better - and it is these kinds of stocks that he is backing in the fund.
Turning to the US, Jeff Rottinghaus of T.Rowe Price, and manager of the Omnis US Equity Fund, talks up the healthy state of the world’s largest economy. Speaking just before president Donald Trump’s tax reforms were passed at the end of December, Jeff sees a subsequent rise in earnings from US listed companies this year. However, he is concerned about valuations for some equities, in areas of the market he is now avoiding.
Beyond equities, investors will be paying close attention to how bond markets react to various policy initiatives from the world’s central banks. Tim Foster of Fidelity International, co-manager of the Omnis Strategic Bond Fund, explains his view that the global economic backdrop remains positive for fixed income, given steady economic growth.
Tim sees central banks committed to slow and gradual tightening, which is using rising interest rates to constrict spending, thus keeping inflation from rising too high. The Fidelity team are focussed on identifying the best opportunities across corporate bonds, government bonds and emerging market debt.
We hope that you find the videos interesting and informative. However, please remember that these reflect the views of each managers held at the time of recording and are subject to change.