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Portfolio Strategies In Turbulent Markets

Portfolio Strategies In Turbulent Markets. Sam Husain Portfolio Manager. Agenda. The Current Market Environment Portfolio Strategy Developed Markets Emerging Markets Commodities Trading Technology and Solutions . The Current Market Environment. US and European Debt/Credit Concerns

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Portfolio Strategies In Turbulent Markets

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  1. Portfolio Strategies In Turbulent Markets Sam Husain Portfolio Manager

  2. Agenda • The Current Market Environment • Portfolio Strategy • Developed Markets • Emerging Markets • Commodities • Trading Technology and Solutions

  3. The Current Market Environment • US and European Debt/Credit Concerns • Market turmoil – US Downgrade - risk of double dip recession • Outlook and forecasts may be cut further and sentiment will stay fragile in the near future. • August global markets experienced a drop. • US fiscal situation is far worse than the aggregate EU. • China and Russia are talking about a new global reserve currency. • A flow of global currencies away from the USD. Source: HSBC Global Research

  4. The Portfolio Strategy – Developed Markets • Developed Markets • 1%-2% GDP Growth. 7%-10% Unemployment. • Reducing exposure to developed markets – looking for dips to buy. • Value and Dividend Yields • Increased exposure to commodities. Source: Bloomberg

  5. Portfolio Strategies – Developed Markets cont. • More Defensive, Global Exposure • Overweight – Consumer Staples & Utilities & Natural Resources • DEO TRP • NSRGY ENB • PEP SU • T • Commodities • Gold, Silver, Platinum, Copper • ABX, NEM, K • Increasing exposure to Precious Metals from 5-10% to 10-20% • Acts as hedge against currencies • Potential for higher returns in inflationary environments and market uncertainty.

  6. Portfolio Strategy - Emerging Markets • Portfolio Managers are turning to Emerging Markets for growth. • 4%-8% GDP Growth. 2%-5% Unemployment • China and India increased demand for raw materials – will look to invest in raw materials to satisfy domestic demand - slow movement away from USD$. • Canada • Latin America • Investments in Infrastructure Projects in: • Latin America • Africa • Middle East • Asia Source HSBC Global Research

  7. Portfolio Strategies – Emerging Markets cont. • Trading in emerging markets in large or small cap securities • Requires accessibility to local exchanges and strong trading execution • Some Emerging Market Names We Like: • 3 Sbio Inc. – Pharma – China • Dr. Reddy’s Lab – Pharma – India • Astra Agro Lestari – Consumer – Indonesia • BancoSofisa Sa – Financials – Brazil

  8. Trading Technology and Solutions • Work with partners who have ability to access all major markets and manage complex transactions. • Manage liquidity with minimal market impact and latency. • Smart Order Suite • Smart-order-routing technology - provides consolidated market access and high-speed efficiency to help ensure best execution. • Infrastructure and Trade Processing Solutions • You want an open architecture which allows the flexibility to customize both in-bound and out-bound order information in a high-speed manner. • You want an automated and fully-customizable solution for electronic order entry, routing and management. • Work with a large clearing firm which can pass through cost savings for institutional order flow.

  9. Conclusion • Institutions and investors are and will continue to expand their approaches to traditional portfolio management • Portfolio Managers must increase returns in a low rate environment – hence the utilization of specialized alpha strategies is emerging markets in strategic asset allocation. • Trading technologies and innovative solutions can be utilized to access these strategies.

  10. Thank You Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. The indicated rate(s) of return is (are) the historical annual compounded total return(s) and does (do) not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced returns. Mutual funds are not guaranteed, their values may fluctuate and past performance is not indicative of future performance. Returns as of May 31st 2010. Consult a financial advisor prior to making any investment decisions. This material does not constitute an offer to sell or a solicitation to buy any security. Please read the fund’s simplified prospectus carefully before investing. Please consult a financial advisor prior to making investment decisions. Commissions, trailing commissions, management fees, and expenses may all be associated with your investment. Mutual funds are not guaranteed and their values change frequently; past performance may or may not be repeated. Mutual fund securities are not covered by the Canada Deposit Insurance Corporation. This seminar is not intended for general media release and is for educational purposes only. Expressions of opinion are those of the Investment Advisor only and are subject to change without notice. HSBC Securities (Canada) Inc. is a wholly owned subsidiary of, but separate entity from, HSBC Bank Canada. Member-Canadian Investor Protection Fund.

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