Picture my delight then when Barings’ latest press release hit my inbox yesterday informing me that not only was its multi-asset team risk on for the first time in over a year, but they have been “adding to risk assets across the board, upgrading equities and downgrading government bonds and cash”.
It’s never that straightforward though, is it? Asset allocation head Percival Stanion explained his team’s change in stance as a tactical move that “may last only a couple of months” rather than the heralding of a new bull market, but still the question begs as to what prompts asset managers to make these shifts.
With the macro top-down approach to investment seemingly still holding sway over bottom-up stockpicking, leading indicators appear to be taking on an even more important role in strategy decisions. And, in the information age, there is no shortage of facts and figures to sink your teeth into.
In common with many of its peers, Barings is looking with optimism towards the US, a market with no equal in terms of its ability to sprout statistics left, right and centre. In one paragraph alone, Stanion pointed to positives from car sales, a rise in job creation, hours worked and wage rates, as well as a stabilising of the housing slump.
Information overload
But how reliable are these sources, and do we risk an information overload? This is a topic I’ll be covering in the next issue of Portfolio Adviser, when Barings among others will be helping me separate the leading indicators from the lagging indicators.
“Many of these indicators are becoming more prevalent in the language of the professional investor and also the private investor who is become more versed as they become more quoted and widely used,” says Mark Robinson, chairman of Berry Asset Management’s investment committee,
“We live in a world of instant messaging, and markets have become quite preoccupied with data releases and the timing of them, and most importantly the trends of those indicators.”
