“There is a huge transfer of wealth from oil producing economies to the rest of us going on and what that means is sovereign wealth funds are having to sell assets in order to meet their liabilities in terms of the services provided to their people,” said Lang’s fellow Ardevora partner Gianluca Monaco. “With very low taxes most of this is financed directly from the funds. “We are seeing signs that the oil collapse is starting to contribute to falls in some non-oil equities because of this effect, which creates buying opportunities.”
Monaco added that large caps and mega caps are the first to be hit by this as they are typically more liquid and therefore easier for the sovereign wealth funds to sell out of quickly.
