Attractive equities despite dismal forecasts: Talaria
Although an unfavourable outlook for 2023 continues to dampen investor confidence, Talaria Asset Management reveals the types of equities to look out for.
Hugh Selby-Smith, co-chief investment officer at Talaria, recommended for equity investors to prioritise income, good value, short duration and rapid payback periods when eyeing out investment returns.
“That means looking towards large-cap healthcare, especially pharma majors, for attractive options,” he explained.
“In terms of regions, Japan and the UK offer value. From a thematic point of view, capex growth and onshoring are likely to have positive long-term benefits for countries like Mexico and industries like industrial automation.”
In the US, the CIO identified that share prices remained expensive but had the potential to fall again.
Selby-Smith said: “This is against a backdrop of unusually rapid interest rate increases in developed markets, falling leading economic indicators such as housing sentiment, and sticky inflation components squeezing near record levels of profitability.”
Despite his observations, he recognised that individual stocks could perform differently and would give investors the opportunity to diversify their portfolios.
“US shares are expensive, pricing in a ‘soft’ or even ‘no landing’. Compared with 2007, many of the forward EV/sales bands of the global index are so high as to be pricing in a good outcome. Usually when this is the case, upside is scarce and risk abundant.”
AUTHOR
Jasmine Siljic
Recommended for you
Lazard Asset Management has announced the launch of a new global equity fund, expanding its qualitative offering for Australian investors.
After introducing its first active ETF to the Australian market earlier this year, BlackRock is now preparing to launch its first actively managed, income-focused ETF by the end of November.
Milford Australia has welcomed two new funds to market, driven by advisers’ need for more liquid, transparent credit solutions that meet their strong appetite for fixed income solutions.
Perennial Partners has entered into a binding agreement to take a 50 per cent stake in Balmoral Investors and appoint it as the manager of Perennial's microcap strategy.
