Political risk ‘here to stay’: Unigestion

Political risk will continue to weigh on markets as developed economies see slightly better growth in Q3, Unigestion says in a new report.

Consumption will remain supportive of growth but the lesson from Brexit is that political risk is “here to stay,” the report says.

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Another risk for the quarter, Unigestion says, is “China’s gigantic level of debt,” with the quarterly outlook contingent on the actions of central banks.

The report adds that emerging economies also show an improving trend and “the combination of improvements in both sets of countries is an encouraging sign for financial assets correlated to growth.”

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The Financial Times reported this week on a “great migration” of portfolios managers to emerging markets as they seek higher growth.

Sergio Trigo Paz, head of emerging market fixed income management for BlackRock, tells the newspaper that institutional investors are moving away from the stagnant growth of the developed world. “This is not just the tactical guys,” he tells The FT. “This is pension funds, sovereign wealth funds. The big, big guys are starting to move.”

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.