Bringing you live news and features since 2006 

Schroders Alan Brown

Schroders’ Crystal Ball Outlook for 2012


Schroders’ chief investment officer Alan Brown (pictured) and European economist Azad Zangana give their outlooks for 2012…

Brown says: “The odds are even more stacked against Government bonds in most of the developed world (with the notable exception of Australia). Timing remains uncertain, but strategically this does not look like a good time to be long duration. And we face significant tail risk credit exposures in a number of weaker sovereigns.

“Equity assets are attractively priced as long as we can avoid Double Dip. However, any material increase in the likelihood of Double Dip should be treated extremely seriously indeed.

Strains within the Eurozone are unlikely to be resolved without some kind of restructuring or change in membership. The all-important question is whether a restructuring is ‘orderly’ or ‘disorderly’.”
Zangana says: “The UK is caught in the midst of a serious European Credit Crunch. We forecast the UK to follow the Eurozone into a recession in 2012.

“As a result, we expect UK inflation to surprise on the downside, though outright deflation is unlikely. However, the unemployment rate is set to rise to over 9%, while wage growth will grow by a mere 1% in nominal terms.

“The housing market is in a very fragile state, and the recession we expect next year is likely to cause house prices to fall by about another 6%.“

Though the coalition government has managed to convince markets that Gilts are almost as safe as German Bunds, the Chancellor is highly likely to miss his fiscal targets if our view on the recession crystallises.“

As for the Bank of England, we expect interest rates to be kept on hold until 2014, and the bank to do at least one more round of quantitative easing, but possibly even two or three! This is because we do not believe QE has much of an impact on the real economy while banks are being forced to deleverage.”

Latest News

As the ETF industry reaches a milestone of USD12.71 trillion in global assets, Brown Brothers Harriman writes that its 2024..
Matteo Greco, Research Analyst at Fineqia International writes that bitcoin closed last week at approximately USD66,300, marking a 7.8 per..
HSBC Asset Management’s (HSBC AM) ETF and Indexing business has passed USD100 billion in assets under management (AUM), reflecting its..
Amundi’s ETF Market Flows Analysis for April reveals that investors added EUR54.1 billion to global ETFs in April with equities..

Related Articles

Dan Miller, IQ-EQ
With just over a week to go till T+1 settlement begins in North America, Canada and Mexico, time is of...
Emily Spurling, Nasdaq
Last October’s ETF Express US Awards 2023 found Nasdaq winning Best Index Provider – ESG ETFs and Best Index Provider...
Vinit Srivistava, MerQube
Index provider, MerQube, launched in 2019, with the aim of providing a “technology-driven answer to the most complex, rules-based investment...
Sean O' Hara
Pacer ETFs has announced the launch of three Cash Cows UCITS ETFs. The firm writes that this will give European...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by