Five market plays following the summer sell-off
By International Adviser, 1 Sep 15
Hargreaves Lansdown’s Laith Khalaf and Axa Wealth’s Adrian Lowcock on which markets to invest in and how to access them.
“Commodities are closely linked to China and have suffered hugely during the summer sell-off, with oil falling below $40 a barrel and other commodities dropping to 1999 prices,” Lowcock explained. “Because commodities are dependent on the outlook of the Chinese economy they are likely to may remain low until we see improved economic data from the region.
“However, China’s economy tends to be cyclical, and often puts in a stronger performance in the second half of the year. At these levels resources look attractive, in particular oil, and commodities exposure would be suitable for patient long-term investors willing to accept some volatility and drip feed money in.”
Conversely, Khalaf is not keen on the sector whatsoever.
“The whole sector has been absolutely battered,” he said. “There has been a 20% increase in the oil price in the last few days, which shows just how capricious those markets are. Prices are very macro-driven and it is very difficult to predict how the market forces will work.”
Lowcock – JP Morgan Natural Resources
Lowcock said: “This is a diverse commodities fund investing in equities, which provides exposure to base and precious metals as well as energy commodities including oil.
“Manager Neil Gregson’s focus is on mid and smaller companies which have the potential for rapid growth. This fund will struggle in falling commodity prices, but should deliver in a commodity bull market.”
Tags: Income | Investment Strategy
