Financial19 challenging times call for outstanding solutions

Rene Maier, Editor-in-Chief of Fondstrends

2019 will be a challenging year. What strategies and tools can financial professionals use to achieve appealing returns during times of political uncertainty, high volatility and low interest rates? Under the trade show motto "Navigating through Challenging Times Possible solutions will be presented and discussed at Finanz19.

The stock market year 2019 has started well. This is at least a ray of hope after most stock markets went into freefall at the end of 2018, leaving empty those who had bet on a year-end rally after the crash in October. But one may hardly trust this brilliant start of the stock markets in the new year, because the uncertainties on the political stages and on the financial markets have remained the same.

Although there has recently been speculation about an easing of the trade dispute between the U.S. and China, which gave the stock markets an additional boost last Friday a sign of how the lifting or lowering of the tariffs levied to date and still threatened could calm the financial markets. But given the unpredictability of US President Donald Trump, you can never be sure until he signs off on a deal. If the disputes drag on, this would not be beneficial to China or the U.S., and therefore not to the rest of the world.

Brexit, another arena with far-reaching consequences for Europe and especially the United Kingdom itself, has been maneuvered by British politicians into a one-way street. They are currently so disoriented that leaving the EU without an agreement is now a real possibility.

The protectionist attitude of the USA and the unilateral action of the UK are grist to the mill of populists and nationalists in other countries. "Globalization, whats next?" is on the agenda right at the beginning of Finance19. The ex-Prime Minister of the UK, Gordon Brown, will be joined by Martin Dahinden, Swiss Ambassador to the US, and Yves Serra, outgoing CEO and designated Board member of Georg Fischer, to discuss the rise of protectionism and its impact on the achievements of globalization and the financial markets.

Uncertain about the risks in the financial markets
Political uncertainties are not the only cause for concern. There is also uncertainty about the development of risks on the financial markets. How much will global economic growth slow down in 2019, how much will profit growth slow down for U.S. companies? How is China doing? Will the world economy slip into recession already this year? How do central banks behave?

Monetary policy turns. The three major central banks are withdrawing liquidity from the market Quantitative Easing is increasingly becoming Quantitative Tightening. Debt, rising interest rates and illiquidity are a dangerous cocktail for the markets. All the more reason for central banks to exercise great tact in their decisions. These risks and possible solutions are discussed by a prominent panel at the financial fair.

And what to expect from the 2019 investment year? Depending on whether risks and stresses escalate, the outcome could be more depressing or more optimistic. Stefan Kreuzkamp, Chief Investment Officer at DWS, puts it this way in his contribution to the financial fair on Fondstrends: "The truth probably lies in the middle. We enter the new year appropriately humble, calling out only mid-single-digit return targets. This also means that we remain cautiously optimistic, because the cycle is not over yet." The traditional market outlook at Finanz19 should also provide further perspectives and insights.

Upswing for active management
In any case, most experts agree on one thing: 2019 will be a volatile year on the stock market. This plays into the hands of active fund management, as flexible strategies make it possible to make the necessary adjustments depending on the market environment. Active management also makes particular sense in China, as Bin Shi and Hayden Briscoe of UBS explain in their article on Fondstrends. They are convinced that Chinese stocks can continue to give excellent returns.

China is one of the key topics at Finanz19. Among others, four Asia experts led by Ross McSkimming of Aberdeen Standard Investments discuss China's role as a game-changer in emerging markets. And Stephen Kam of Schroders speaks on "China A Investing in the second largest equity market in the world".

Focus on sustainable investments
The topic of "Sustainable Investments" will also play an important role in several program items at the financial fair will play an important role. Among others, politicians and pension fund experts will discuss on Wednesday how pension funds and foundations are already implementing the UN sustainability goals in asset management. They will also be asking themselves whether concessions have to be made in terms of expected returns in return. Other discussion panels will address how sustainable approaches can be integrated into the investment process and whether impact investing is the golden highway to sustainable investing.

These are just a few of a total of sixty program items at Finanz19, which will take place on 22. and 23. The event will take place on January 1 at StageOne in Zurich Oerlikon with 98 exhibitors. Already at the 7. For the first time, the Swiss real estate fair, IMMO19, will also be held as part of this year's financial fair. 67 industry representatives present their products, strategies and services. The fair is aimed exclusively at professional investors, for example from banks, pension funds, asset managers, family offices and the real estate industry.

As every year, Fondstrends presents a special newsletter with articles on the topics of the financial fair. I wish you an exciting read on Fondstrends.