Senior investors see diverse investment potential across global asset classes in 2014: Neuberger Berman

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Managers and strategists at global investment manager Neuberger Berman envision positive momentum across many asset classes in 2014, as the global economy stabilises and generates moderate growth, according to Solving for 2014, the firm’s third annual outlook across global equities, fixed income and alternative investments.

As the investable universe has grown—across borders and asset categories—Neuberger Berman’s focus has broadened as well. This year’s edition is deeper, covering more ground than previous issues, reflecting the market’s increased diversity and the firm’s broad perspective.

The outlook provides Neuberger Berman’s views on equities, fixed income and alternatives, all on a global basis, and capitalises on the fundamental research of its portfolio managers and analysts.

“From an economic perspective, things are improving across a number of major economies,” said Joseph Amato, President and Chief Investment Officer of Neuberger Berman.

“As the Fed and other central banks adjust their approaches, investors should remain alert. Inflation trends remain moderate and we do not expect a significant uptick in rates this year. These shifts in policy merits close attention as investors adjust portfolios to capitalise on the improved growth and somewhat tighter monetary conditions.

In equities, Mr Amato anticipates continued earnings growth this year tied to modest operating leverage as developed economies pick up.

In fixed income, investors can likely expect slow and steady growth and the potential for rising rates, said Brad Tank, Chief Investment Officer, Fixed Income.

“In my view, we’re probably in the middle innings of this growth phase in the US,” Mr Tank said.

“Things are getting better, but not rapidly. For the coming year, we anticipate a relatively benign growth environment, with continued momentum in the US, a modest acceleration in Europe and an ‘Abenomics’-driven recovery in Japan, offsetting China’s slower growth trajectory.”

An improving economy should lead to more private equity buyout activity, according to Anthony Tutrone, Neuberger Berman’s Global Head of Alternatives.

“At this point, we haven’t gotten to a major acceleration in buyouts, but we believe deals will begin to pick up,” he said.

Alan Dorsey, the firm’s Head of Investment Strategy and Risk, said a key issue for 2014 is achieving incremental return—whether through capital appreciation or additional yield—mindful that return outlooks have gradually shifted downward while interest rates remain extremely low. Alternatives are one key area that has gained traction, but another particularly important one from a portfolio allocation standpoint is emerging markets, he said.

“As investors enter 2014, improving global growth combined with shifting monetary policy are creating a nuanced environment, with obstacles but also opportunities,” said Paul O’Halloran, Managing Director, NB Australia.

Solving for 2014 is available for download at: www.nb.com/solving2014. The site also features more than twenty video presentations from Neuberger Berman senior investors.

About Neuberger Berman

Neuberger Berman was established in 1939 and is a US-based asset management company with approximately US$214 billion in assets under management throughout the world (as at 30 September 2013) and over 400 asset management professionals.  It is one of the world’s largest independent, employee-controlled financial services organisations

 The company offers a number of funds in a range of asset classes including global and emerging market equities, bonds, and alternatives such as hedge funds and private equity. 

Neuberger Berman Australia gained a licence to operate in Australia in April 2011.

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For further information please contact:

Paul O’Halloran – Phone: 03 9649 0906

Lucas Rooney – Phone: 03 9649 0912

20 January 2014