Following 12 months of relentless twists and turns on global markets, Kames Capital’s Pauline McPherson has outlined the key themes she believes will dominate the rest of 2015.
The co-manager of the Kames Global Equity fund said benign global growth, widespread demographic change and disruptive technology would all take centre stage this year.
Writing in a recent investment note, she said two of the highest consensus trades of last year – namely, that US bond yields would rise as the Fed’s quantitative easing policy was unwound and European economies had begun a cyclical upswing – “proved unequivocally wrong”.
While Ms McPherson stressed the team did not specifically research macroeconomics issues, it did tend to seek out mispriced quality companies that would outperform over the long term via themes influenced by the macro environment.
With below-average global growth and a general lack of pricing power in a deflationary world, the manager suggested airline Ryanair would continue to do well, as a “low-cost disruptive business model”.
Ryanair has always been focused on growth, added the manager, with plans to almost double its passenger base in the next 10 years, to 150m by 2024.
On the same theme, she said the growth opportunities to a discount retailer like top holding TJX looked promising, particularly as US real earnings finally begin to rise.
Another theme is demographic change, which the team believed would continue to have a larger and more widespread impact than the markets currently expect.
“We have recently purchased Naver Corporation, a Korean internet and mobile platform provider. We believe their Line platform will enjoy strong growth predicated upon the entertainment and shopping preferences of the so-called ‘millennials’.
“At the other end of the age spectrum, Fresenius, a German-based healthcare group, should see increasing utilisation of its network of private hospitals.”
