THE WisdomTree BLOG
Infographic: Five reasons we believe Indian equities could spice up your portfolio
India is at an interesting crossroad where leadership is pro-actively making tough reforms for long-term growth.Two pillars of the Indian economy, consumption and demographics, have strong growth projections. View our infographic to learn the five reasons why we believe Indian equities could spice up your portfolio.
China A-shares, with respect to global equity benchmark indices, have been problematic for some investors in terms of market accessibility and index inclusion.
The evolution of the relatively restrictive Qualified Foreign Institutional Investor schemes—QFII and RQFII—combined with the relatively new Stock Connect schemes for both Shanghai and Shenzhen stocks has created a material change to investors’ ability to trade A-shares. These moves have created an environment of more flexible market access which has increased the likelihood that, on a revised and limited basis, MSCI may include A-shares in their benchmark indices. It is important to note that the current proposal is substantially different from the previous attempts and only creates a modest inclusion of A-shares as opposed to a comprehensive approach.
Our structural bull-thesis for Japan calls for an endogenous, self-sustaining domestic demand up-cycle that is driven by Japan’s private sector. Demographics is the key force – for households, the structural shortage of labour will be pushing up incomes and improving job security, thus creating purchasing power for a “new middle class”; and for companies, the scarcity of human capital will force a shift towards more capital-intensive business models, i.e. a structural up-turn in business investment to improve the quality of the domestic capital stock. Also, M&A activity is poised to pick-up, with the scarcity of human capital forcing fundamental industrial reorganization. Clear-speak—Japan’s productivity is ready for a positive super-cycle, which should translate into a structural up-turn in capital returns.
Europe’s “back to normal” leaves safe havens at risk: Should you hedge German Bunds?
The European political uncertainty and risks posed to financial markets are—for now—over. A Liberals-led mainstream coalition in The Netherlands firmly aligned with Germany’s EU agenda and a pro-European President of France upending fringe/extreme sentiment preserves the status quo. Also, Germany’s election in September should be a non-event with Merkel leading in the polls and the Social Democrats headed by Martin Schulz as runner up. Italy is unlikely to have its election until 2018.
Screening for quality: Deconstructing our Quality Dividend Growth strategies
Income investors need not fear the Fed’s rate hikes. Opportunities persist despite recent pressure on high-dividend yield strategies, and income investors looking to position around tightening credit conditions efficiently may consider a contrasting style exposure within dividend payers: Companies’ ability to grow dividends sustainably, as opposed to large dividend pay-outs.
Oil: Trading opportunities ahead
As we approach the next OPEC meeting on 25th May, the oil price is getting closer to a critical juncture with pressure on OPEC producers to restrain supply, rises in oil stock levels and the rebound in shale oil. Volatility remains the one overriding feature of the oil price and even if OPEC comes to an agreement on further production cuts this may not be enough to create a more stable oil price environment.
Balancing global opportunities against regional risks: Why you might consider global quality equity
Five reasons why we believe Indian equities could spice up your portfolio
India is at an interesting crossroad where leadership is pro-actively taking tough reforms for long-term growth. Two pillars of the Indian economy, that is consumption and demographics, have encouraging projected growth numbers.
Over the past few months since the US election, markets have been driven by the expectation of the reflation trade and the positive impact on both the US economy and equities.
Despite China's Q1 6.9% growth rate, the 2017 target is 6.5%, a touch lower than the 6.7% GDP growth achieved in 2016. With these lower projections, can investors remain optimistic? Vania Pang, of ICBC Credit Suisse Asset Management (International) Co. Ltd. (ICBCCSI)’s, Capital Market and Investment Solution of Index and Quantitative Investment team, weighed in.
Le Pen vs Macron: How is your portfolio positioned?
first round of the French elections
Infographic: 2017 European Geopolitical Risks
View our infographic to read our coverage of this year’s European geopolitical events and risks.
We maintain our view that Japanese risk assets—equities and real estate—are on track for a multiyear structural bull market. We believe 2017 is poised to bring a positive reversal of earnings momentum, with a pickup in top-line sales growth and a weaker currency capable of delivering 25% to 30% earnings growth (after last year’s drop of around 8%, calendar year). Given the relatively attractive valuation backdrop—TOPIX is trading at a modest discount to its 10-year averages on both trailing and forward P/E multiples—the rising visibility of earnings is likely to be the principal driver of Japan’s market performance. In contrast, we expect policy action and initiatives to be relatively less important market drivers for Japan, and the Bank of Japan (BOJ) to stay put and maintain its zero-rate 10-year bond yield target for the foreseeable future.
Does currency hedging have a branding problem?
One topic we often find exploring with investment professionals is the role of currency risk in international portfolios. We believe the industry has a branding problem with currency-hedged strategies; this is a legacy issue that may never be fixed for the industry, so education is critically important. The branding issue goes to the heart of what should be the default choice for international investments, in our view.
Nizam Hamid is an ETF Strategist for WisdomTree in Europe and has extensive experience in the European ETF market. Prior to this he was at C8 Investments, a systematic hedge fund, focusing on business development and quantitative strategies, before that he was a consultant at FTSE. From 2010 to 2012, he was Head of ETF Strategy and Deputy Head of Lyxor ETFs, at the time Europe’s second largest ETF issuer. Before joining Lyxor he was Head of Sales Strategy for the Europe and the Middle East at iShares in London. Prior to that, he was Global Head of ETFs, Portfolio and Index Strategy at Deutsche Bank from 1998 to 2008. He has also worked as a quantitative analyst in London and Tokyo for UBS, BZW and Bankers Trust / NatWest Markets. He holds a Degree in Economics from the University of Liverpool.
Director of Research
Viktor, who has over 14 years’ experience in research, joined the firm from Renaissance Asset Managers where he was Head of Research. Viktor provides macro research on various themes covering equities, commodities and fixed income. His research for WisdomTree in Europe offers investment strategies for the current range of Smart Beta UCITS ETFs as well as the Boost range of short and leveraged Exchange Traded Notes. Viktor has previously worked as a Research Analyst at BlackRock and Thomson Financial. He started his career as an Equity Strategist at Commerzbank, after he completed a Masters in Economics from Maastricht University, in the Netherlands.
Nick Leung is a Research Analyst for WisdomTree in Europe. He is responsible for macroeconomic commentary and analysis, formulating investment strategies and trade ideas, as well as the maintenance of research collateral. Prior to joining in 2015, Nick was at Source, having completed his Master’s Degree at Imperial College London. During this time he was also involved in an ice-cream entrepreneurship project with Unilever. Nick holds a BA in Economics from the University of Nottingham.
WisdomTree's Head of Japan
Capital Markets and Investment Solutions, Index and Quantitative Investment, ICBC Credit Suisse Asset Management (International) Company Limited
Ms. Pang holds a M.Sc. in Development Finance from The University of Manchester, a M.A. in Journalism and a B.A. in Business Administration from The Chinese University of Hong Kong.