NEW YORK--(BUSINESS WIRE)--While 2012 is shaping up as another volatile year in the capital markets, this may be a good time to capitalize on the attractive opportunities awaiting investors, according to portfolio managers and strategists at Neuberger Berman Group LLC, one of the world’s leading employee-owned money managers.
“While heightened volatility and tight correlations will continue to predominate in the short term, we believe there are exceptional long term opportunities for bottom-up investors,” said Joseph Amato, president and chief investment officer of Neuberger Berman.
Below are excerpts from the insights of various portfolio managers and strategists at Neuberger Berman. Their views on asset allocation, multi-asset class portfolios, fixed income, equities, and alternatives can be found in “Solving for 2012,” an outlook for this year available publicly on the Neuberger Berman website https://www.nb.com/outlook2012/. Neuberger Berman does not impose a “house view” and the report reflects the individual views of its portfolio managers.
- U.S. stocks: “Taking into account both the macro issues and underlying fundamentals, we recognize the likelihood of continued near-term market volatility, but we also think that U.S. equities are generally attractive at current valuation levels and have attractive upside potential for long-term investors.” – Leah Modigliani, multi-asset class strategist
- Developed international stock markets: “While there are countries and sectors to avoid, we think there are also world-class opportunities for long-term investors willing to look beyond the headlines. Within Europe and Japan, we believe defensive sectors like health care and consumer staples hold appeal. We also find certain segments of the consumer discretionary sectors attractive—such as cable TV and satellite broadcasting.” – Benjamin Segal, portfolio manager, head of global equity team
- Emerging markets equities: “From our perspective, the secular advantages emerging markets enjoy over developed markets have only increased, driving and sustaining their longer-term growth trajectories. As we look to the year ahead, we are cautiously optimistic. When the market returns to focusing on the fundamentals, we think domestically driven emerging markets companies could be a real growth story for 2012.” – Conrad Saldanha, portfolio manager, global equity team
- Greater China stocks (mainland China, Hong Kong and Taiwan): “Looking ahead to 2012, China’s economic prospects will likely be affected by slower projected growth in the U.S. and Europe. However, we think a healthy job market supported by rising wages reinforces the potential for select opportunities in sectors driven by economic growth and consumption, such as consumer discretionary and consumer staples. More broadly, although short-term uncertainties persist, we believe the Greater China equity markets are at compelling valuations and seem likely to rebound during the coming year.” – Frank Yao, portfolio manager, head of Greater China equity team
- U.S. investment grade bonds: “While the near-term outlook for the credit market is cloudy, we feel the intermediate- to longer-term picture remains bright. Near term, a number of macro factors could overshadow generally strong fundamentals, which typically drive the performance of the credit market. While the situation in Europe remains fluid, it is our belief that a resolution will eventually occur. We also feel that the U.S. will skirt a double-dip recession.” – Andrew Johnson, portfolio manager, chief investment officer, investment grade fixed income
- High yield bonds: “Given the underlying fundamentals and current spread levels, we have a positive outlook for the high yield/bank loan market in 2012. From a fundamental perspective, despite moderating economic growth, corporate profits have generally been solid and leverage levels are manageable. In our view, the large amount of cash sitting idle on corporate balance sheets provides something of a cushion if economic growth weakens further. We also feel that implied default levels may be overstated.” – Ann Benjamin, portfolio manager, chief investment officer, leveraged asset management
- U.S. municipal bonds: “We believe that the municipal market can produce positive returns in 2012, albeit not as robust as those in 2011. Based on the macro uncertainties that exist, we feel that having a thorough understanding of individual municipal credits is imperative. This is especially true given the pressure on the federal government to reduce spending and the subsequent trickledown impact on funding for state and local municipalities.” – James Iselin, portfolio manager, head of municipal fixed income
- Emerging markets debt: “We have a generally positive outlook for emerging market external debt in 2012. Supporting the asset class, in our view, are strong fundamentals. Continued growth in emerging market economies should help keep their balance sheets generally strong and debt service ratios fairly low. The default picture looks rather benign for emerging market countries as a whole in 2012.” – Bobby Pornrojnangkool, portfolio manager, emerging markets debt
- Private equity: “Although private equity is affected over the long term by public market results, the current environment favors the advantages of private investors who can invest based on underlying business fundamentals without regard to ‘market noise.’ Market conditions for distressed investors should be favorable in 2012 against a backdrop of high volatility, challenged economic growth, political instability and the ongoing crisis in Europe.” – Anthony Tutrone, global head of alternatives
- Hedge funds: “We believe the volatility which characterized markets in 2011 will result in significant opportunities across a range of strategies in 2012. Looking within the overall hedge fund universe, we believe the nimble capabilities and motivation of emerging players make them especially compelling and an important element in an overall hedge fund allocation.” – Eric Weinstein, chief investment officer, fund of hedge funds team
About Neuberger Berman
Neuberger Berman is a private, independent, employee-controlled investment manager. It partners with institutions, advisors and individuals throughout the world to customize solutions that address their needs for income, growth and capital preservation. With more than 1,700 professionals focused exclusively on asset management, it offers an investment culture of independent thinking. Founded in 1939, the company provides solutions across equities, fixed income, hedge funds and private equity, with $183 billion in assets under management as of September 30, 2011.
This material is presented solely for informational purposes and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. Information is obtained from sources deemed reliable, but there is no representation or warranty as to its accuracy, completeness or reliability. All information is current as of the date of this material and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Investing entails risks, including possible loss of principal. Please refer to Neuberger Berman’s 2012 Outlook, “Solving for 2012,” for fuller discussions and related disclosures. The Outlook is available publicly on the Neuberger Berman website at https://www.nb.com/outlook2012/
All information is as of September 31, 2011, unless otherwise indicated and is subject to change without notice. Firm data, including employee and assets under management figures, reflects collective data for the various affiliated investment advisers that are subsidiaries of Neuberger Berman Group LLC (the “firm”), including, but not limited to, Neuberger Berman LLC, Neuberger Berman Management LLC, Neuberger Berman Fixed Income LLC, NB Alternative Fund Management LLC, NB Alternative Investment Management LLC, NB Alternatives GP Holdings LLC, and NB Alternatives Advisers LLC.
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