10 Global Investing Strategies for 2013
Looking for international investing ideas? Every year, Morgan Stanley Smith Barney unveils its list of global investment ideas. Its 2012 list generally posted strong gains led by emerging markets equities (up 19.1%), dividend aristocrats (up 16.9%), U.S. large-cap growth (up 15.3%), and global gorillas (up 13.4%).
Check out some of its ideas for this year or check out the full report from Morgan Stanley Smith Barney here. (The order is not indicative of preference.)
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Benchmarks: 50%/50% split between the Dow Jones-UBS Commodity Total Return Index and the spot price of gold
Morgan Stanley said: Broadly speaking, the performance of commodities has significantly trailed that of other risk assets during the past year. … With regard to gold, the accommodative policy stance of the world’s major central banks seems likely to continue to fuel concerns about future inflation and currency debasement. This, in turn, should spur investment demand for gold.
Benchmarks: JP Morgan Emerging Market Bond Index, local currency, unhedged
Morgan Stanley said: Emerging Markets bonds are one of the more attractive bond sectors. This asset class has undergone a rerating during the past several years because of improvement in the underlying credit quality of the sovereign issuers.
Benchmark: Russell 1000 Growth Index
Morgan Stanley said: As with the global gorillas, large-cap stocks are better-positioned to benefit from established sales channels in emerging markets. Moreover, from a valuation perspective, large-cap stocks appear historically cheap relative to mid-and small-cap stocks.
Benchmarks: S&P 500 Dividend Aristocrats Index
Morgan Stanley said: With money market interest rates and traditional safe haven bond yields likely to remain near record lows, dividend-paying equities should continue to provide an attractive alternative for income-seeking investors.
Benchmarks: S&P Global 100 Index
Morgan Stanley said: We believe that investing in large, DM companies with outsized exposure to the emerging markets—we call them “global gorillas”— is another way to capture the growth from economies that expect to account for about 80% of global growth this year.
Benchmarks: MSCI Emerging Markets Index
Morgan Stanley said: Emerging market economies are on much better footing than their developed-market counterparts, due to growing middle-class consumer sectors that support domestic demand.
Benchmarks: Barclays Capital US Aggregate Corporate Index
Morgan Stanley said: Investment grade corporate bonds continue to offer an attractive combination of yields that are higher than those on traditional safe havens, such as U.S. Treasuries, and high credit quality.
Benchmarks: Barclays Capital AMT-Free Intermediate Continuous Municipal Index
Morgan Stanley said: In light of the outlook for subpar economic growth, which will continue to strain state and local government finances, we favor “high quality” (rated A or better) general-obligation and essential-service revenue bonds rated BBB or better with maturities of five to 11 years.
Benchmark:: ISE Water Index
Morgan Stanley said: We continue to favor the investment prospects for water—a finite resource that is not always available where it is needed.
Benchmark: Alerian MLP Index
Morgan Stanley said: MLPs are concentrated in natural-resource industries such as oil, natural gas and minerals extraction. They are attractive to income-seeking investors