China: Growth, debt and liquidity promise to capture the spotlight

2017 Investment Outlook series

Mike_ShiaoLooking ahead in 2017, the Invesco Equity Investment team in Asia believes the focus of attention for the Chinese economy and equity markets will be on growth, debt and liquidity. We expect China’s policymakers to focus their efforts on near-term growth stability, with reforms taking a secondary role for now. Consumption will continue to be the growth driver. China’s debt problem will linger on, but we see no imminent risk of an economic blowout. We are seeing a shift in loan activity from corporations to consumers, which we see as a positive development for the economy. As for liquidity, the existing Shanghai-Hong Kong Stock Connect and the recently launched Shenzhen-Hong Kong Stock Connect will continue to enhance market accessibility from both north- and southbound channels. In particular, we believe that global investors in offshore Chinese equities will benefit from the strong liquidity in the southbound channel. In this piece, we will explore these three topics in greater depth.

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Unit investment trusts: In volatile markets, consider a patient, methodical investment approach

2017 Investment Outlook series

Jack TierneyMacro view

As we look to 2017, we at Invesco Unit Trusts are very happy the US presidential election is behind us and that the world has not changed dramatically. More importantly, our Economic & Market Outlook Committee believes that the slow growth economy will continue, that the “lower for longer” thesis regarding interest rates will stay in place, and that corporate America will chug along at a modest pace of sales and profit growth.

We think a reasonable bull case can be made for the US dollar, between pressure on the British pound stemming from the Brexit vote to leave the European Union, as well as an overbought Japanese yen. We believe inflation in the US should remain

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Convertible securities: What do we see ahead after the election?

We explore which policies could bode well for this asset class in 2017

Stuart NovickSince the November elections, the Invesco Convertible Securities team has gotten a number of questions from investors about how the environment might change for convertible securities under the new Trump administration. While it’s too early to know which proposals will become policy, here are three potential developments that could work in favor of the US convertible securities market, if they come to pass.

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Multi-asset: What could challenge markets in 2017?

2017 Investment Outlook series

David JubbIn the Multi Asset team at Invesco Perpetual, we have a two- to three-year investment horizon, which we believe helps reveal attractive investment opportunities by accounting for both cyclical and structural market drivers.

Given this investment horizon, we form a central economic thesis which summarizes the path we believe the global economy will follow over the next two to three years. This economic outlook does not drive the selection of our investment ideas, but is one of the tests for each idea before it is approved for the portfolio. We must believe that each idea has the potential to generate a positive return against our two- to three-year view of the world.

One of our intentions in choosing this time horizon is to avoid

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Real assets: Prices, performance and predictability dominate investors’ view of real assets

2017 Investment Outlook series

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Investors have been drawn to real assets in general and to real estate in particular due to the comparative stability and attractiveness of their income returns and the prospects for growth.
A recent heightening of capital market, political and geopolitical risk levels has resulted in a less certain outlook for investment assets broadly, including real assets. This may reinforce the attractiveness of real assets’ income potential, which is largely based on long-term contractual cash flows.

Three themes to watch in 2017

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