Countdown 2023, a look into the crystal ball: PART 3 - Schroders and Merck Finck.

At the end of the year, economists, investment strategists and asset managers look ahead. These days they publish their forecasts and strategies for the new year.

Private wealth attends the most interesting conferences and publishes the most exciting thoughts of the professionals to offer you, dear readers, inspiration and guidance for a (hopefully) successful investment year 2023.

Sincerely yours,

Klaus Meitinger

Note: Despite careful selection of sources, no liability can be assumed for the accuracy of the content. The information provided in private wealth is for informational purposes and is not an invitation to buy or sell securities.

 

Part 3: Schroders and Merck Finck - bright spots in the East.

The global economy is facing its weakest year since the financial crisis, according to Keith Wade, chief economist at investment house Schroders. The economist expects a recession in the U.S. and Europe in 2023. Only the emerging markets are expected to do a bit better. "This is mainly due to China," says Wade, "after a difficult year in 2022, the lockdowns there are now being increasingly eased. We're also seeing signs that the housing market has bottomed out. That will support the economy." Wade forecasts real growth of 5.0 percent in 2023 - which would be close to the government's official growth target again.

"In the first half of the year, China's covid easing could significantly drive the reopening," Robert Greil, chief strategist at Bankhaus Merck Finck, also believes: "In the best case, similar catch-up effects as we saw in Europe and the U.S. in 2021 are then conceivable in the summer." According to Greil, that would also be positive for the global economy. From spring 2023, a new global growth cycle should begin, not least for this reason.

Consistently, Robert Greil sees opportunities in emerging market equities. "There, earnings expectations have already been massively reduced over the past year - a process that, by the way, has yet to happen in the U.S. and especially in Europe. Despite the downward revisions, emerging markets are cheaply valued today. In China, equity valuations are currently even close to the lows of the last 20 years," informs Robin Beugels, Head of Investment Management at Merck Finck.

The professionals identify monetary policy as an additional plus point for investments in emerging markets. "In the U.S. and Europe, further interest rate hikes and a tightening of the liquidity situation due to balance sheet reduction are on the cards. In contrast, in many emerging markets - examples are China or Brazil - we are talking more about key interest rate cuts," Greil analyzes.

At Schroders and Merck Finck, investments are therefore also currently being made in emerging market bonds. "We have a preference here for ETFs that are broadly diversified not only regionally, but also across all sectors - government and corporate bonds," says Beugels.

Finally, Azad Zangana, Senior European Economist & Strategist at Schroders, develops an interesting thought. "We are seeing shortages in labor markets all over the world. That will stimulate investment in technology. Robotics is therefore interesting for all investors who integrate thematic approaches into their portfolios."