Important themes for the rest of 2019
Right now, we're watching the evolution of economic activity; we're really interested to see whether growth rates continue to slow, also whether there's an evolution from manufacturing out into the service sector of the economy. Emerging market businesses in recent months have had to contend with a lot. Whether it be changing international trade terms or a 180 degree turn in interest rate policy, and that's all creating disruption. It's also creating a bit of uncertainty. So the other thing that we're going to be looking for as we go into the second half of the year is whether there will be a government response. Up until now we've been relying on central banks, but we're looking to see whether the governments respond with some kind of fiscal spending plan.
Which countries or sectors offer the best opportunities?
Right now, India offers the best opportunities in terms of its mix of domestic growth prospects, but also a shielding from what's going on in the external trade environment and from an industry perspective, right across the technology sector. We're still finding attractive ideas and that extends into the disruptive areas of the financial services sector – areas like payment systems insurance and Fintech in general.
Are any geopolitical factors affecting your outlook?
Dealing with trade wars impacts us when we're looking at stocks, by increasing uncertainty in the forecasts that we make. This can come as customer demand. It can be the cost of meeting that customer or just the changing investment needs around the customers. However, at a portfolio level we're actually seeing increased conviction because of the businesses that we invest in are profit-leading companies with strong opportunities for growth and they're very much the ones that will win out in this kind of environment.
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