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All I want for Christmas…eight wealth managers’ wish lists

The prospect of opening presents and seeing whether Father Christmas has delivered is exciting for everyone, but St Nicholas could have his work cut out meeting discretionaries' expectations with anaemic global growth and volatile markets on the cards for 2013.

Normalisation of monetary policy

Marcus Brookes, head of multi-manager at Cazenove, would like to see a normalisation of monetary policy globally in 2013. He acknowledges this is by no means a small ask, however, and probably something that is more likely to be achieved by 2018.

‘A lot of the issues we are facing today are a result of quantitative easing and zero interest rate policy. If you have got a normalised monetary policy, it must mean the global economy is looking healthier, the financial system is fixed and you reprice money to the correct level,’ he said.

He believes the ideal situation would be a return to interest rates around the 3%-4% mark and gilt yields back at 4%, with an adjustment in asset prices.

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UK back on sound footing

Berry Asset Management’s chief investment officer Mark Robinson is hoping for new Bank of England governor Mark Carney to put Britain back on a sound footing in 2013.

‘There are a number of things that we would like to see fall into place during 2013, the most immediate being some give and take by both sides of the US political divide to break the current fiscal cliff stalemate, so that economic growth is not sent off the rails.

‘Similarly, seeing a soft economic landing in China and further initiatives to restore financial stability in the eurozone are also on our wish list for 2013.

‘But closer to home it could be Mark Carney’s arrival in June as the new governor of the Bank of England that could be an interesting turning point in how the UK is perceived on the international stage. His appointment has already been greeted with enthusiasm and we hope that this fresh blood will restore confidence within the banking sector and in the UK economy as a whole.’

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Increased infrastructure investment

Dart Capital’s Richard Whitehead is hoping for more government investment in infrastructure projects, which should boost employment and make the country more fit for doing business.

‘We think it would be good to see a pick-up in infrastructure projects by the government that have a clear connection with an increase in UK jobs,’ he said. ‘Linked to this perhaps bringing in compulsory training or apprenticeships for job seekers aged up to 25 could lead to a corresponding reduction in welfare payments as long as these jobs were real opportunities. We need to see some real confidence emerging for the younger members of society in the UK.’ ‘We need to improve roads, rail, hospitals, bridges, tunnels, ports, to make this country more competitive. It takes as long to travel from Southampton to London now as it did in the era of steam trains.’

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Action from EU leaders

None of the action taken by EU leaders so far has address the regions real problems, argues Pau Morilla-Giner, partner and chief investment officer at London & Capital, and he would like to see politicians come up with some real answers in the new year.

‘I would like for European politicians to do what is right in the long term (not just what is politically less damaging in the short term) and to work towards solutions that address the structural nature of Europe’s issues,’ he said.

‘So far the solutions have focused on short term liquidity relief for struggling peripherals and funding support for struggling financial institutions. None of these policies addresses the structural solvency problem that affects Europe.’

I would like politicians to address the three key items that needs happening for the crisis to be truly over: firstly the collective pooling of liabilities (eurobonds), secondly a European deposit guarantee (banking union) and thirdly the European Central Bank as lender of last resort.

Unfortunately, I suspect that none of my wishes will be answered, and so another volatile 2013 is expected, especially as we approach the single most defining event of the year – the German elections after the summer.

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Recovery in US and China

Gavin Haynes, managing director of Whitechurch Securities, would like to see a global recovery led by China and the US.

‘For a successful year in 2013, the most important factor is that we see a continued recovery of the two largest global economies – the US and China,’ he said.

‘While the fiscal cliff in the US is providing nervousness, the recovery in the housing and jobs markets suggest the economy is on a firm footing and can achieve around 2% GDP growth in 2013. Although not spectacular, this compares favourably to the forecast for Europe and our own economy.’

With the new political regime likely to stimulate growth and a recent upturn in economic activity, a recovery scenario for China in 2013 could be realistic, he says. Coupled with an improving US, this could create attractive opportunities across markets.

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Market stability

Renewed investor confidence and a modicum of market stability is top of Turcan Connell’s chief investment officer Haig Bathgate’s wish list.

‘I’m hoping for a resumption of confidence. If we have a bit more stability from the central banks and particularly markets, that might allow things to move forward, letting companies invest more and make decisions on a slightly longer term basis.

‘Stability will also give them confidence to recruit more people. This will also see an end to the risk-on/risk-off markets. How that’s going to happen I don’t know, but it is what I would like to see.’

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Trends in equity markets

James Calder, research director at City Asset Management, would like to see an end to unpredictable equity markets and a return to visible trends.

‘Everyone has become jaded since the 2008 financial crisis and there is always that worry with mass media hysteria that we are going to face another crisis, but that’s not going to happen. What we are looking for is benign markets and even markets that are gently trending up. That would be great.

‘Even markets that are trending down would be good, as long as we can see the trends as multi-asset investors we can exploit that.’

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A return to normal markets

David Norman, founder of TCF Investment is hoping for a year-long period of normalcy in markets when assets will do what they are supposed to do - but accepts that this is sadly unlikely.

‘Wouldn’t it be nice if the world just did what it was supposed to do? So if equities rise in value, dividends grow nicely and bonds are a good diversifier, it would be nice and it would be really boring,’ he said. ‘I don’t need the excitement of bonds being at record highs, I just want things to behave the way they are supposed to.’

‘It would be nice if my pension fund went up 8-9% next year instead of up 3% one month, down 10% the next. I’m investing for the long run, can I just have a nice spell? The chances of this happening are none whatsoever though!’

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