Return to fundamentals key to navigating 2020

T Rowe Price global equities equities active management

25 February 2020
| By Chris Dastoor |
image
image
expand image

Although 2019 was a great year for equities, that momentum might not carry into 2020 so stock selection will be important, according to T. Rowe Price.

Hari Balkrishna, associate portfolio manager for the T. Rowe Price Global Equity fund, backed active management’s potential to be independent from macro forces.

“I feel quite constructive on equities for 2020, I’m not expecting another year of 30% returns, but what is good about this year looking ahead is some of those big tail risks are behind us,” Balkrishna said.

“When we think about what we can looking forward to in 2020, it is back to fundamentals, corporate earnings growth and stock picking.

“Versus other equity classes, equities are still reasonable here, but I view 2020 and beyond as being fundamental rather than last year which was more macro driven.”

Balkrishna noted Evotec as an example of an equity that would likely grow despite any macro issues in the market.

“It’s got a roughly US$4 billion market cap and is one of Europe’s contract research organisations, but they co-own a lot of the pipeline they work on,” Balkrishna said.

“Evotec has a stake in something like 100 pipeline projects, even if one or two of those projects would pay off that would be that would be worth almost the market cap of what it is today.”

According to FE Analytics the early starters for the year were Wenlock Global (11.55%), L&G Artificial Intelligence ETF (10.15%), CFS Baillie Gifford Global Growth (8.9%), Hyperion Global Growth Companies (8.78%) and CC Marsico Global B (8.5%), month to 31 January, 2020.

The T. Rowe Price Global Equity fund returned 7.34%, while the sector returned 3.3%.

Performance of the ACS Global Equities sector month to 31 January, 2020

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

3 weeks 4 days ago

This verdict highlights something deeply wrong and rotten at the heart of the FSCP. We are witnessing a heavy-handed, op...

1 month ago

Interesting. Would be good to know the details of the StrategyOne deal....

1 month ago

Insignia Financial has confirmed it is considering a preliminary non-binding proposal received from a US private equity giant to acquire the firm. ...

1 week 3 days ago

Six of the seven listed financial advice licensees have reported positive share price growth in 2024, with AMP and Insignia successfully reversing earlier losses. ...

5 days 16 hours ago

Specialist wealth platform provider Mason Stevens has become the latest target of an acquisition as it enters a binding agreement with a leading Sydney-based private equi...

4 days 20 hours ago