“This is a period where we are slowly winding-in our risk budget but at the same time we think there are reasonable opportunities in equity markets overall. There is still decent value in global equities outside of the US and attractive valuations in emerging markets.”
Wait it out
Still, other wealth managers are happy to sit tight for now. Tim Cockerill, investment director at Rowan Dartington, is a believer in a wholesale shift from growth to value within equities, though he stresses this will more likely lead to changes to the managers he uses in different regions, rather than any great moves in asset allocation.
He says: “From looking at our screens, I would say there has been a notable deterioration in the ability of managers, across all asset classes and sectors, to generate consistent returns in 2016.
“We have graded managers for the past 12 years and patterns of big change have emerged this year.
“The scale of the change tends to suggest we are at an inflection point in markets where we are getting new leadership coming through – value stocks – and I would expect that to continue into 2017.”
It is clear, however, that not everybody is convinced by the pace of change, while others are working out new contrarian angles. Besides, if everybody now favours value companies, how can they remain as such great bargains?
