Global bull run could continue for as long as two years, but may be ‘noisy’ for investors, Investec Asset Management says
- A widely forecast recession, expected as soon as 2020, will not be a ‘repeat of 2008’, Investec Asset Management’s John Stopford says
- Firm’s Global Multi-Asset Income Fund has reduced equity holdings to lowest level in six years
The bull market and the longest economic expansion globally since the second world war will continue for as long as another 18-24 months, but it could be a “noisy” one for investors, according to Investec Asset Management.
John Stopford, head of multi-asset income at Investec, said investors needed to be more defensive in their approach as the market cycle was quite “long in the tooth”, but there were opportunities to take on risk.
“The context we are operating in is a very uncertain one, a very mixed market since early 2018,” Stopford said. “We’ve had periods of weakness and we’ve had periods of strength. Not a lot of overall direction. The question that I think is appropriate to ask is where are we in this bull market? Are we in fact towards the end of the bull market, or might it continue a little bit further?”
Stopford oversees Investec’s US$1.3 billion Global Multi-Asset Income Fund. The fund, which is defensive in nature, has had an annualised return of 3.8 per cent since its relaunch in 2013.
He said some of the defensive stocks that the fund has focused on have become pricey as investors anticipate the end of the economic cycle, so the fund has focused more on cyclical stocks lately.
As trade tensions between the US and China have risen over the past year, a number of economists have forecast a recession as soon as next year, as tariffs and dampened business sentiment are weighing on investment.