“A focus on reasonably valued companies with resilient franchises and strong balance sheets has historically rewarded investors,” said Roberts. “It’s these types of companies that provide the potential to deliver a healthy level of income, real capital growth and lower levels of volatility and drawdown than the broader market.
“Since the end of the eurozone crisis in 2011, we have seen an astonishing run of positive returns from global developed markets – with the MSCI World Index gaining around 60% on a total return basis. The question now is whether we will see the earnings growth that is necessary for markets to continue their upward trajectory. While earnings have seen a recovery over the past two years, I believe they are now looking stretched and this may well lead to a more challenging environment.
“Companies with a track record of paying dividends are often more predictable and resilient businesses. This type of company tends to provide good long term returns with less volatility than the wider equity market,” Roberts added.