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Quick Note: Downgrading US, Europe and Brazil !
April 29, 2016

We are downgrading three markets on the back of sharply higher prices and stagnant or deteriorating fundamentals.


Author : iFAST Research



 Quick Note: Downgrading US, Europe and Brazil!
  • Equity markets have staged a strong rebound since we upgraded the markets on 12 February 2016
    • Market Performance: US +12.4%, Europe +11.5%, Brazil +36.9% (in local currency terms)

  • While equities have moved sharply higher, underlying fundamentals have either remained the same or posted slight deterioration for the three markets

  • Higher prices with lower earnings estimates have resulted in higher valuations for all three markets, leading to lower forecasted returns for investors
    • Expected Annualised 2 Year Returns: US -0.6%, Europe +1.2%, Brazil +4.1% (in local currency terms)

  • We are downgrading the Star Ratings of the markets as follows:
    • US - From 2.5 "Neutral" to 2.0 "Unattractive"
    • Europe - From 3.0 "Attractive" to 2.5 "Neutral"
    • Brazil - From 4.0 "Very Attractive" to 3.0 "Attractive"

  • Investors should not chase prices or performances, consider seeking more defensive strategies for US and Europe, relook their portfolio allocations

  • Full updates for all three markets to follow

Chart 1: US Equities

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Chart 2: European Equities

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Chart 3: Brazil Equities

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Disclaimer: iFAST and/or its content and research team’s licensed representatives may own or have positions in the mutual funds of any of the Asset Management Company mentioned or referred to in the article, and may from time to time add or dispose of, or be materially interested in any such. This article is not to be construed as an offer or solicitation for the subscription, purchase or sale of any mutual fund. No investment decision should be taken without first viewing a mutual fund's scheme information document including statement of additional information. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Investors should seek for professional investment, tax, and legal advice before making an investment or any other decision. Past performance and any forecast is not necessarily indicative of the future or likely performance of the mutual fund. The value of mutual funds and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. Please read our disclaimer on the website.Please read our disclaimer in the website.



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