With the commodity price boom over and China shifting from investment to consumption, investors need to think carefully to position themselves for a rapidly changing global environment.
2013 investment trends
Despite the grand scale of Chinese demand, the composition of Chinese growth is changing. A historic shift away from investment and towards consumption spending will require investors to think very differently about ways to gain exposure to China.
While the European debt crisis is far from over, the level of investor concern has dwindled. European economic weakness has been largely factored into equity prices, with markets taking the view that, provided there is no larger systemic problem, any default is largely an issue for the bond-holders.
The US economy continues to face some hurdles, but evidence of a housing recovery continues to build. The potential ancillary benefits to employment and investor confidence may prove to be some of the positive surprises for markets in 2013.
It's now clear that the commodity price boom ended in 2011 — but that isn't necessarily bad news for investors. History shows that equity markets perform better when commodity prices are trending sideways, even in resource-rich economies like Australia and Canada.
Download the report to help you assess the influence of these themes on your portfolio.
Download the report