Equities are the real low risk investment now - Artemis

Added 12th September 2016

With governments around the world increasingly indebted but many companies ‘flush with cash', Artemis fund manager Simon Edelsten argued that investing in global equities is the real low risk option now.

Equities are the real low risk investment now - Artemis

“Unusual economic conditions make investors unwilling to put too many of their eggs in one basket,” according to Edelsten who manages the Artemis Global Select Fund. But investors need to be savvy about diversification and remember that there is never a case for diversifying into an asset whose investment characteristics are poor, he said. After all, many multi-asset funds have missed the mark over the last couple of years, despite boasting more diverse investment universes, he noted.

While the number of central banks that have adopted negative interest rates is unprecedented, Edelsten argued that this scenario still fits a historical pattern which favours equities.

“Remember too that the great global bear markets of the past – when share prices worldwide fell all at once – have generally had one of two characteristics: either economies were riddled with debt, as in 1980 and 2008, or the valuation of equities had become overstretched, 1987 and 2000. Currently, governments are indebted but companies tend to be flush with cash – perhaps the credit risk of a diversified portfolio of quality companies is lower than lending money to sovereign borrowers?”

Although assets like index-linked bonds, gold and property all come with their investment pros and cons in the current negative interest rate climate, Edelsten holds that investing in global equity markets provides investors with a more “diverse and not overly correlated set of choices.”

“For example, Japanese companies, currently driving their share prices higher by improving shareholder returns, have very little correlation with internet stocks in the US,” said Edelsten. “Neither group has much correlation with European bank shares. As long as one can find a broad range of different investment opportunities one can end up with a well-diversified portfolio.”

Edelsten added that to ensure adequate diversification in his fund he limits his exposure to any one sector or investment theme to around 20% and keeps his exposure to any single stock below 3%.  

Kames Income Hub


Vincent McEntegart, manager of the Kames Diversified Monthly Income Fund, explains how he aims to deliver a stable and sustainable income of 5% p.a.*, paid monthly, by investing in a range of asset classes

Square Mile Research

Lazard Emerging Markets
Lazard Emerging Markets

Talking Factsheets is a video service for users...

Visitor's Comments Add your comment

Add Your Comment

We won't publish your address



Investment Strategy




PA Channel Island 2016
PA Channel Island 2016

8th November 2016
The Royal Yacht, Jersey


17th November 2016
The Andaz

PA Emerging Markets 2016
PA Emerging Markets 2016

1st December 2016
The Mayfair, London

Sponsored Content

Investment Strategy