2010 will be more of an alpha market than a beta one, with active managers looking for stocks that can deliver 10-15 per cent rather than 50-60 per cent, according to London-based Mark Tinker, lead fund manager of global equities at AXA Framlington.
On a recent visit with Australian institutional investors Tinker said it’s the Asian consumer who will fuel some of the best growth opportunities in 2010. “We are looking further into the online gaming and broadcast internet space, where we believe it will finally be possible to sell the metaphorical ‘can of Coke to a billion people’,” Tinker says.
Part of the AXA Investment Managers stable, AXA Framlington is one of the few global equities managers that follows a top-down thematic approach, building portfolios around a series of topical macro themes – competitors include THS, Sarasin, Lazard and Deutsche. The manager has introduced a new Global Opportunities Fund which aims to take advantage of “economic tailwinds”.
According to Tinker’s latest weekly missive to investors, one of AXA Framlington’s key themes is that global investors can play the emerging markets either though local stocks or international ones. The emerging market exposure of McDonald’s or Coca-Cola or P&G or LVMH, let alone Wal-Mart, J&J or Disney, is enabling these ‘nifty fifty’ stocks to grow without a booming US consumer. Strong balance sheets, steady but growing sales lines and in many cases healthy yields are likely to make these stocks the next move for those investors that increased their “risk” by buying corporate bonds this year and now want to add a little more.
“For 2010 we suspect that equity portfolios may take on a barbell of earnings growth at one end and quasi-corporate bonds at the other,” Tinker said. “As someone put it this week, the most attractive funds going forward will not be those offering sky-high returns, but those offering the sort of steady low-digit returns from equities that Bernie Madoff pretended to provide.”