One of the most striking divergences since the start of the global financial crisis has been the speed and magnitude of the US recovery relative to that of the rest of the world.
However with the previous tailwinds starting to fade, US equities may look less attractive in the global equity beauty parade.
Active managers are likely to be looking at consumer-related sectors and stocks with the prospect of job growth, wage inflation, falling energy prices and lower-for-longer interest rates. Obvious beneficiaries are house-builders but also consumer services companies such as retailers, restaurants and the like.
There could also be some bargains in the energy sector as the balance between oil supply and demand begins to stabilise. With greater divergence in both stock and sector returns typically comes wider dispersion in fund manager returns.
This may be the year where we see an increase in the number of active managers outperforming their index. However, choosing the right investment style and fund manager remains paramount.
