Invesco Select Trust plc – Global Equity Income Share Portfolio: manager insights
In this video update, Stephen Anness provides an update on the global equity market after the first quarter of the year and shares his views on the outlook for Global Equities.
Stephen answers the following questions:
- There has been a lot to worry investors in Global Equities in 2022, inflation and Ukraine war especially, are you surprised how well markets are holding up?
- Have you adjusted your process or approach in the light of events?
- How did the investment trust perform over the first quarter of the year?
- Have many changes been made in the portfolio over the first quarter?
- How do you see the outlook for Global equities for the rest of 2022 and into 2023?
Glossary of terms
Also known as monetary policy tightening. Tightening monetary policy typically involves central banks raising interest rates to reduce the demand for credit, and selling government bonds to the market to reduce the money supply and liquidity in the economy.
A cyclical stock is a stock whose profits are significantly impacted by level of economic growth and optimism in the global economy. Cyclical stocks tend to perform well in periods when the global economy is growing, and less well when the economy is slowing down or in recession.
A company whose profits are highly correlated with the positive or negative developments in global economic growth
We no longer saw the upside opportunity for growth in AMEX profits outweighing the potential downside risks to profits. Hence the company became a much less attractive investment proposition.
Loose monetary policy, also known as expansionary monetary policy is when a Central bank seeks to expand or grow an economy. This is done by lowering interest rates to increase the demand for credit, reducing the reserves the banking sector must hold in order for them to make more commercial loans, or buying government bonds from the market in exchange for cash to stimulate liquidity (so called ‘quantitative easing’).
The US Federal Reserve
The term ‘hawkish’ means a more aggressive stance towards monetary policy designed to reduce inflationary pressures. For example, a central bank is described as hawkish they might have tightened monetary policy by increasing interest rates or might be expected to take stronger action.