For Equities
Equities:
Simply allocating a scheme’s equity investments to the major geographic markets through index-tracker funds is not sufficient. With the speed of change increasing around the world, such a strategy is unlikely to achieve good performances in the short, medium and long term, nor will it address the risk of all the world’s equity markets suffering prolonged negative periods. The reasons might be briefly summarised as:
a)The emergence of new economic powerhouses such as China and India;
b) The growing number and importance of large international companies;
c)The inter-relationship of the major markets around the world;
d) The economic competition for global commodities such as oil and metals;
e)The fluctuations in currencies, which may be exacerbated by carry trading; and
f) The threat of protectionism becoming a reality.
