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Global fund managers are expecting to earn impressive returns from all Nigerian asset classes in 2017 as valuations remain low, underlying fundamentals hold strong and developed market institutional framework weaken.
A low-return outlook for traditional balanced portfolios of the fund managers has demanded that investors expand their toolkit to enhance growth potential, with emerging market (EM) equities presenting a potential opportunity given anticipated higher rates of economic growth than many developed countries and more attractive valuations.
Michael Del Buono, head of portfolio strategy at Makena Capital Management had told Thompson Reuters that he favours investments in things like healthcare, retail and for-profit education in Nigeria and other countries such as Indonesia and the United Arab Emirates.
The world’s largest asset manager, Blackrock, said in its report entitled Global Investment Outlook 2017, that recent reflationary turn presents a tailwind for some emerging markets, bolstering commodity prices and boosting consumption
“Maintaining exposure through the full market cycle, however, is critical to capturing the gains EM investing can deliver. We favour approaches that aim to take the bite out of swings in EM equities, either through a minimum-volatility strategy or pairing EM stocks with higher-quality EM bonds,” said the Blackrock report.
