‘Slightly better global growth next year’
CAPE TOWN – Global equities “did surprisingly well”, delivering an average return of 25percent in rand terms in 2019, Old Mutual portfolio manager John Orford said in a presentation on Friday.
In South Africa, bonds delivered a “reasonable” return of 8percent, while the average balanced unit trust fund equity portfolio barely beat inflation, with a 5percent return, he said.
He said slightly better global growth was expected in 2020, with the US Federal Reserve likely to maintain its easy monetary policy stance, and it could even reduce interest rates further during the year.
He said global earnings were relatively weak during 2019, but the average price/earnings ratios of global equities increased, which resulted in the good returns.
That meant “a lot has been priced in” for global equities looking into 2020, and much would depend on whether global equity returns could deliver on those prices in 2020.
Source: iol.co.za
