It is difficult to read any investment outlook at the moment that is not heavy on the headwinds before the obligatory paragraph that starts with ‘but on the other hand…’.
Within this paragraph you will undoubtedly read the line about today’s environment being ‘tough for active fund managers’ as has been the case since 2008/9 when most investment rules around equities and fixed income got torn up before being shredded entirely.
Thankfully, there is one investment outlook, published yesterday by Fidelity, that turns this on its head, founded as it is on research that centres on the positives and then sneaks in its ‘but on the other hand…’ views.
It summarises its annual Global Analyst Survey as a ‘temperature check on the corporate sector’ aggregating the views of its in-house analysts and their thousands of meetings with company management over the past year.
On the downside, after two years of analyst optimism, this most recent survey refers to an overall sentiment that is “delicately balanced” revealing that Fidelity analysts “are seeing increased weakness in company fundamentals and are generally less optimistic or more pessimistic than last year”.
On the upside, Michael Sayers, director of research at Fidelity International, explains: “Our most important new theme this year is the relative robustness of the consumer sectors compared to many others.
“The consumer is expected to be the incremental driver of growth this year, supporting ongoing innovation that is changing the face of technology and healthcare in particular. As consumers’ purchasing power benefits from low energy prices, low inflation overall, supportive housing markets, wage growth and recovering labour markets, the survey finds that management confidence in both consumer staples and discretionary goods has turned neutral from negative.”
