Schroders Equity Lens December 2022: your go-to guide to global equity markets
Our regular analysis highlights the charts and data that matter to equity investors.
Authors
What’s been driving stock prices? Are they currently expensive or cheap? And which regions and sectors are poised to do well next?
These are some of the questions we aim to answer in our monthly publication – the Schroders Equity Lens, a compilation of key trends in global equities illustrated through thought-provoking charts.
Click here to download your December copy.
Summary
Global equities advanced strongly in November. The MSCI World index gained 7.0%, reducing the year-to-date decline to -10.9% (in US dollars). UK equities remain the top performing market this year (slide 12).
Companies remain preoccupied by the risk of a recession. This can be measured via analysis of company transcripts (slide 6).
The recent market rally may prove premature if a recession does materialise. Typically, returns are negative in the first six months of a recession and strengthen towards the end (slide 7).
Our research shows that “false dawns” occur in most deep bear markets. Rallies of 10% or more are not uncommon before the market bottoms out (slide 8).
Despite the rally of the past two months, several markets still look cheap relative to their own history. But they may not be cheap enough given the weak economic outlook. US valuations are still expensive (slide 9).
Schroders’ analysis shows that ESG scores are biased against small cap companies. These inefficiencies are a return opportunity for active small cap investors (slide 10).
Learn more about investing in Schroder Global Emerging Markets Fund.
Important Information:
This material has been issued by Schroder Investment Management Australia Limited (ABN 22 000 443 274, AFSL 226473) (Schroders) for information purposes only. It is intended solely for professional investors and financial advisers and is not suitable for distribution to retail clients. The views and opinions contained herein are those of the authors as at the date of publication and are subject to change due to market and other conditions. Such views and opinions may not necessarily represent those expressed or reflected in other Schroders communications, strategies or funds. The information contained is general information only and does not take into account your objectives, financial situation or needs. Schroders does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this material. Except insofar as liability under any statute cannot be excluded, Schroders and its directors, employees, consultants or any company in the Schroders Group do not accept any liability (whether arising in contract, in tort or negligence or otherwise) for any error or omission in this material or for any resulting loss or damage (whether direct, indirect, consequential or otherwise) suffered by the recipient of this material or any other person. This material is not intended to provide, and should not be relied on for, accounting, legal or tax advice. Any references to securities, sectors, regions and/or countries are for illustrative purposes only. You should note that past performance is not a reliable indicator of future performance. Schroders may record and monitor telephone calls for security, training and compliance purposes.
Authors
Topics