Nikko AM Raises Overweight Stance on Global Equities
“There are certainly some worrisome issues, as always, but we find none of them convincing enough to halt the upside momentum in equity prices,” - John Vail, Nikko Asset Management
Below summary by Chris Walker
Against a largely positive global macroeconomic scenario reinforced by the US Federal Reserve’s accommodative monetary policy, Tokyo-based Nikko Asset Management has increased its already overweight position on global equities.
The firm’s key investment committee made this call on the back of its expectations of equity prices rising even further in the coming months. This was the second straight quarter that the committee arrived at an overweight stance on global equities since its previous meeting in June, after revising its stance to neutral in March for the first time in about two and a half years.
However, Nikko Asset Management chief global strategist Mr John Vail cautioned, “Undoubtedly, geopolitics remains a significant risk factor and we will continue to be ready to adjust our view. China’s economy must also be watched very carefully because the tail risk of a major downturn is far from negligible.”
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Frequently Asked Questions about this Article…
Nikko Asset Management has increased its overweight stance on global equities due to a largely positive global macroeconomic scenario and the US Federal Reserve's accommodative monetary policy. They expect equity prices to rise further in the coming months.
An 'overweight' stance on global equities means that Nikko Asset Management is investing a larger portion of their portfolio in global equities than the benchmark allocation. This reflects their confidence in the potential for equity prices to increase.
According to Nikko Asset Management, significant risks include geopolitical factors and the potential for a major downturn in China's economy. These factors could impact global equity markets.
Nikko Asset Management reviews its stance on global equities quarterly. They have maintained an overweight stance for two consecutive quarters after revising it to neutral in March.
The US Federal Reserve's accommodative monetary policy plays a significant role in Nikko Asset Management's investment strategy by creating a favorable environment for equity price growth, which supports their overweight stance on global equities.
Nikko Asset Management views the current global macroeconomic scenario as largely positive, which supports their decision to increase their overweight stance on global equities.
China's economy is significant in global equity markets because a major downturn could pose a substantial risk. Nikko Asset Management emphasizes the importance of monitoring China's economic situation closely.
John Vail is the Chief Global Strategist at Nikko Asset Management. He provides insights and guidance on the firm's investment strategies, including their stance on global equities.
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