Invesco Canada blog

Insights, commentary and investing expertise

Alternatives: Alternatives may be an answer to challenging investment environments


Alternatives Investment Strategist
December 14, 2018

Subject | 2019 Investment Outlook Series | Industry views | Institutional | Invesco | Macro views

Key takeaways

  • Expect lower equity returns, increased volatility and rising interest rates in 2019.
  • Alternative investments can help investors weather a more challenging environment.
  • Investors need to be proactive and avoid the mistake of adding alternatives reactively.

Following an idyllic 2017, when equity markets were characterized by strong returns and low volatility, we were reminded in 2018 that markets are often volatile and can go down just as easily as up. In 2019, I believe investors should be preparing themselves for lower equity returns, increased volatility and rising interest rates. Given this outlook, investors would be well-served (in my opinion) to consider the addition of alternative investments to their portfolios.

Continued

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Wall Street Bull, Statue

Real estate: The outlook for real estate fundamentals is positive, but risks remain


Managing Director, Head of Global Real Estate, Managing Director, Head of Global Securities, Invesco Real Estate
December 14, 2018

Subject | 2019 Investment Outlook Series | Industry views | Institutional | Invesco | Macro views

Key takeaways

  • Risks today are crystallizing; many are more global in nature.
  • Pricing remains attractive; however, yield/cap rate compression is largely behind us.
  • Total returns in 2019 are likely to be driven by net operating income growth.

Strong growth in developed economies should continue to support favorable real estate fundamentals in the near term. The baseline scenario remains very positive, and global listed equities’ earnings yields are providing a positive spread over local government bonds, a sign that real estate is still fairly priced. Yet macro risks to the outlook are perhaps now greater today than in prior years; many are increasingly global in nature. They include rising populism, an escalation of the US-China trade war, a monetary policy normalization misstep, a disorderly Brexit or a China debt crisis.  Should any one of them materialize, it would have the potential to derail the global growth outlook to a measurable degree.

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city planning, real estate

Chinese equities: What is in store for Chinese equities in 2019?


Chief Investment Officer, Asia ex Japan
December 14, 2018

Subject | 2019 Investment Outlook Series | Industry views | Institutional | Invesco | Macro views

Key takeaways

  • We believe Chinese equities represent some of the best structural opportunities across global markets.
  • Following the correction in 2018, we believe the risk-reward picture has turned exceptionally favorable.
  • We believe corporate fundamentals will remain strong given solid support from the domestic market.

There has been a disconnect between sentiment and fundamentals when it comes to Chinese equities in 2018. Market sentiment has been weak (driven by the changing relationship with the US and moderating growth), while economic fundmentals remained decent. China was on track to deliver its growth target despite moderation, widely known as a result of economic transitioning towards high quality growth.

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Technology: A look at the technologies we believe will define 2019


Global Head of Innovation, Disruptive Technology and Strategy
December 14, 2018

Subject | 2019 Investment Outlook Series | Industry views | Institutional | Invesco

Key Takeaways

  • Artificial intelligence applications will continue to improve, with the ability to digest and analyze ever-increasing amounts of data to drive a better customer experience.
  • Companies will begin investing more heavily in the reduced latency, enhanced security and bandwidth savings of edge computing.
  • Blockchain and token economics diffuse into the early adopters.
  • Companies’ abilities to attract and retain diverse and skilled talent in these emergent technologies, including their physical space and location strategies.

Artificial intelligence and the data wars

The cat is out of the bag

Artificial intelligence (AI) applications are likely to have a profound impact on businesses, markets, and global economies in 2019 and beyond. At the micro level, machine learning and the vast (and growing) amounts of underlying data should continue to improve client experiences through predictive analytics and personalization.

Continued

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Humanoid robots, innovation

Global equities: A decade after the global financial crisis, a mixed bag of growth


Chief Investment Officer, Invesco Perpetual
December 14, 2018

Subject | 2019 Investment Outlook Series | Industry views | Institutional | Invesco | Macro views

Key takeaways

  • The overvaluation of structural growth stocks, such as technology stocks, is unsustainable, in our view.
  • For markets used to easy money, the transition to a more ‘normal’ period for central banks is likely to pose a challenge.
  • The European market looks a lot more attractively valued than the US, especially those stocks more sensitive to the direction of the economy, such as banks.

The outlook for global growth has become more mixed. While the synchronised economic expansion that I discussed in this piece last year is less widespread today, it should still be sufficient for corporate earnings to grow. Amid continued regime change – quantitative easing has given way to quantitative tightening, and interest rates are rising – the US continues to press ahead, while there is less momentum elsewhere.

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European Central Bank

Putting the sell-off in perspective


Global Market Strategist, Invesco Ltd.
December 11, 2018

Subject | Invesco | Macro views

Last week saw major swoons in the stock market and U.S. Treasuries. As of this writing, the sell-off has been continuing. However, I still hold out hope that we could see stocks finish higher than where they are now by year-end. Yes, Virginia, there still is the possibility of a “Santa Pause.”

Continued

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