deVere Group - International Investment Strategy

International Investment Strategy

deVere Investment Strategy aims to provide clients with a comprehensive picture of the global economy and regular updates on current stock market and fixed income trends, in order to assist investors in making informed investment decisions. It is headed by Tom Elliott, deVere's International Investment Strategist, who produces regular videos and blogs on a wide range of topical investment issues, and regularly speaks at seminars for clients at deVere offices around the world.

The core-satellite approach to investing has several advantages over buying a multitude of separate, high risk investments. The bulk of the portfolio is handed over to a professional multi asset investor, who is qualified to match expected returns with expected levels of risk. The satellite investments allow the client to try to 'beat' the market with higher risk investments, but total portfolio risk is reduced through setting a limit on the size of the satellite allocation relative to the core.

Note: The information contained in this chart is for general guidance on matters of interest only. The deVere Group disclaims any responsibility for content errors, omissions, or infringing material and disclaims any responsibility associated with relying on the information provided herein.

Tom Elliott

International Investment Strategist

Tom Elliott is the deVere Group's International Strategist. His role is to help the Group's clients to better understand the economic and political influences that drive capital markets, which in turn drive investor returns.

Tom, formerly an Executive Director at JP Morgan Asset Management, has 25 years experience in the financial sector.

He is currently a visiting lecturer in the department of political economy at King’s College, London.

Tom Elliott
Recent Broadcasts
February 05, 2018

Market sell-off is likely to be short lived
Tom Elliott

Tom Elliott explains why the recent drop in global stock markets is unlikely to turn into a significant correction.

Older posts

Why a little Emerging Markets and Japan in your portfolio might be good
Compared to the U.S, stock markets in emerging markets and Japan both offer value and are leveraged plays on robust global GDP growth.
January 09, 2018

The soft Brexit deal: Good news for the U.K
Thanks to pressure from the Republic of Ireland this week, the 8th December agreement on Brexit divorce terms suggests strong U.K regulatory ‘alignment’ with the E.U will persist after Britain leaves the E.U. The ambiguity of the text makes it difficult to work out its substance, but this suggests that U.K is now course to remain in the single market and customs area for agricultural and manufactured goods. This is good news for sterling and the U.K economy.
December 08, 2017

Explaining the Sharpe and the Information ratios
Tom Elliott, deVere Group's International Investment strategist, looks at two of the most widely used metrics in fund management for assessing performance.
October 09, 2017

Why Invest in Bonds?
Bonds continue to be a valuable source of diversified returns within a multi-asset portfolio.
August 30, 2017

Stock market investors should not fear the new tone coming from central banks
With inflation at or below central banks target rates in all the major economies except the U.K, the current market fear of a coordinated tightening of global monetary policy appears unwarranted. More credible risks to stock markets include the risk of a credit crunch in China, some over valued risk assets such as US tech falling out of fashion
July 06, 2017

Video Archive >>

March 13, 2018

Investment Outlook
Tom Elliott

Market sentiment: Supportive of risk assets, with double-digit corporate earnings growth in the US and elsewhere expected in the first quarter results. The NASDAQ closed yesterday at a new high, and other major US stock market indices have also made a strong recovery from the late January/ early February correction. Excellent US jobs data on Friday, which showed new hiring at a two-year high while year-on-year wage growth has fallen, suggests that the current US economic cycle has further to run before running into capacity constraints. Diplomatic progress on North Korea, and the possibility that NAFTA, EU and other allies of America may be excepted from Trump’s steel and aluminium tariffs (so keeping down US price rises in the metals), have also contributed to the generally positive market sentiment on Wall Street.

When it comes to the Fed, Jay Powell appears to be more hawkish head than Janet Yellen. But after initial wobbles, US investors have accepted that interest rates will be rising at a slightly faster pace than previously expected and driven as much by the Fed’s desire to ‘normalise’ rates as by fears of inflation.

We tend to focus on the progress US stock market because it sets the tone for global stocks, as well as representing 59% of the MSCI World index, a key global benchmark. But it should be noted that elsewhere the investment mood is more cautious. The MSCI US index is up 4.3% in USD since 1st January, but the MSCI World ex US index is up only 0.1% and down 2.4% in local currency terms, with much weaker recoveries made after the correction.

It is not just the effect of chilling words from Trump on global trade wars (he declared them ‘easy to win’), but a fear that China is becoming more autocratic after President Xi Jinping made public his intention to have unlimited terms in office, and messy election results in Italy may herald a more populist, anti-EU government. The continuing outperformance of the US is a surprise to many commentators, given that valuations favour other stock markets.

Risks. As we wrote in the last Investment Outlook, Fed policy error represents a key risk for investors. The first risk from the Fed is that it moves too fast, too soon to raise rates and thereby extinguishers US growth. We can expect the dollar to finally rally in this environment, negatively impacting on US exporters and emerging market economies. The second Fed policy risk is the opposite, and is less likely. It is that the Fed fails to raise rates fast enough in the event of a genuine inflation risk. Jerome Powell, the incoming Fed chair, is inexperienced and will working with a volatile President, adding to the risks.

In geo-politics the Middle East poses the biggest risk, with so many actors involved in proxy wars. Good for gold, the dollar and the oil price (until a rise in US fracking output then pushes the price down again), but bad for risk assets such as equities. The outcome of Brexit negotiations remains uncertain, with recent U.K government speeches on the subject indicating a lack of agreement amongst ministers on the end goals.

A multi-asset portfolio for the long term. We favour a long-term multi-asset approach to investing, whereby investors choose a suitable combination of global equities and bonds (depending on their risk profile and investment horizon), and leave the portfolio unchanged. Regular re-balancing ensures winners are sold and losers are bought – which financial history, and common sense, supports. The chart below shows a typical long-term balanced portfolio based around 60% global equities and 40% global bonds. Financial history shows this combination to offer good returns relative to risk (i.e, volatility). Investors should try to be as diversified as possible, perhaps using the 60/40 model as their guide. Multi-asset funds based on this principle are available, often with different ratios of bonds and equities depending on the level of risk suitable for an investor. Note that the chart shows neutral weightings for the long-term investor, it does not incorporate the near-term weighting suggestions of the previous paragraph.

Older posts

Investment Outlook
February 18, 2018

Investment Outlook

January 28, 2018

Investment Outlook
January 03, 2018

Investment Outlook
November 30, 2017

Investment Outlook
November 16, 2017

Blog Archive >>