What a difference a year makes

Today’s economic and market landscape bears little resemblance to the one investors faced at the start of 2018. Volatility returned in a meaningful way this year, and risk aversion has replaced the euphoria of synchronized global growth, prompting many investors to reevaluate sources of potential return. 2019 looks set to be a year defined by change, from shifts in market dynamics to transformations in traditional alliances.

Christopher P. Conkey
Christopher P. Conkey, CFA
CEO and Chief Investment Officer, Public Markets
Stephen J. Blewitt
Stephen J. Blewitt
Global Head of Private Markets
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We offer six themes we believe will take center stage, each tied by a common thread of emerging risks and how to manage them. While the U.S.-China trade war will begin to have real consequences, there are additional threats to global growth, argues our Global Chief Economist Megan E. Greene. One of the many knock-on effects of the current trade dispute is a remapping of agricultural alliances, observe Keith A. Balter and Daniel V. Serna, who conduct economic research at Hancock Natural Resource Group: They explain the implications for farmland investors. Daniel S. Janis III, our head of multi-sector fixed income, notes that risks are also rising in global fixed-income markets and that a benchmark-centric approach may no longer suffice.

 

As always, there will be investment opportunities in the year ahead. Our head of Asian fixed income, Endre Pedersen, points to structural change in emerging debt markets that carries some exciting investment potential, while Emory W. (Sandy) Sanders, Jr., CFA, of our U.S. equity team, believes the U.S. stock market could display unexpected resilience. Active management itself may even gain a sharper edge as ESG research becomes more firmly integrated, argues Emily Chew, our global head of ESG research and integration.

 

We hope you enjoy this year’s outlook and find it useful to your planning, and we welcome your feedback on our new format.

The asset allocator’s view

The following table summarizes our views on various asset classes.

Source: Global Asset Allocation Team, Manulife Asset Management, as of December 13, 2018. Individual portfolio management teams may have different views and opinions that are subject to change without notice.