Investment strategies: Underweighting of emerging market equities

Nannette Hechler in the video: "Recession risks are not increasing"

In spite of trade conflicts and weaker global economic growth, the outlook for equities remains promising. Nannette Hechler-Fayd'herbe, Chief Investment Officer of the International Wealth Management division, explains why investors should nevertheless adjust their investment strategy in the video.

Investment strategy for a mixed starting position

The financial markets and investors are concerned about escalating trade conflicts and weakening global economic growth. However, Nannette Hechler-Fayd'herbe, Chief Investment Officer of the International Wealth Management division at Credit Suisse, believes that the trade dispute will primarily affect industrial production. "We have to expect that sentiment there will deteriorate for a few months."

Nevertheless, recession risks are not increasing, because consumer sentiment is still very good in both the US and Europe. Monetary policy is also having a stabilizing effect. "The US Federal Reserve is likely to cut interest rates by a quarter of a percent in July," states Nannette Hechler-Fayd'herbe. She describes in the interview how investors should position themselves in this mixed starting position.

Video interview with Nannette Hechler-Fayd'herbe, Chief Investment Officer – International Wealth Management

In the interview, Nannette Hechler-Fayd'herbe explains why equities are expected to perform very well for the rest of 2019.

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Emerging markets: Bonds instead of equities

Nannette Hechler-Fayd'herbe is cautious when it comes to emerging market equities, as they are particularly dependent on industrial production. Instead, she advises investors who want to position themselves in emerging markets to buy bonds: "Emerging market bonds in hard currencies are a better option."

Credit Suisse also recommends underweighting a second group of equities. Nannette Hechler-Fayd'herbe gives you the details in the video.