This website uses cookies to improve user experience. By using our website you consent to all cookies in accordance with our Cookie Policy. Read more
F&C strategy director says US economic data is not a disaster for equities Go compare with our comparison table

F&C strategy director says US economic data is not a disaster for equities

08 October 2010 / by Paul Dicken

Further data reinforcing the view that economic growth in the United States has stagnated should not prompt equities to ‘take fright’ over a return to a fall in earnings, F&C Asset Management has said.

Payroll data released on 8 October and news on the US unemployment rate are likely to reinforce expectations amongst investors that the US central bank, the Federal Reserve, will undertake further quantitative easing to stimulate the flagging economy.

Ted Scott, director of UK strategy at F&C Asset Management said: “Although the data was disappointing it was not a disaster and underpins the status of the US economy that is growing at a level that is well below trend and much slower than is normally the case at this time of a recovery.”

Scott said the prospects of a double dip recession had not been raised but the authorities were facing difficulties in stimulating the economy that appeared to be stagnating at a low level or growth.

The dollar fell sharply on 8 October and the yield on government bonds fell to the lowest level since January 2009, which Scott said was due to a belief that further stimulus to the economy was likely.

“The reaction of bonds suggests that QE [quantitative easing] is now priced into the markets and the upward move in equities in the last few weeks is also partly a response to expected further monetary stimulus.”

Quantitative easing involves a central bank buying high-quality assets in the market, such as government and corporate bonds, to boost the funds available in the financial system.

Scott said he expected most of the market action in coming weeks to take place in the currency markets because of increasing international friction over the relative strength and weakness of currencies.

The annual meetings of the International Monetary Fund and World Bank are taking place in Washington this weekend where the issue of currency strength is likely to resurface.

China came under renewed pressure this week to allow the value of its renminbi currency to rise. Following a summit with EU leaders, Chinese premier Wen Jiabao said the EU should treat the exchange rate issue ‘objectively and fairly’.

© Fair Investment Company Ltd

 Product NameISA OptionIncome YieldMore Info
Henderson Strategic Bondyes5.7%More Info >
Income Paid Quarterly. Investing in higher yielding assets which will include most types of fixed interest securities, this fund aims to deliver a quarterly income to investors. See latest fund factsheet for details.
Newton Asian Incomeyes5.43%More Info >
Income Paid Quarterly.The objective of the Sub-Fund is to achieve income together with long-term capital growth predominantly through investments in securities in Asia Pacific ex Japan (including Australia & New Zealand) region. The Sub-Fund may also invest in collective investment schemes. See latest fund factsheet for details.
Newton Higher Incomeyes5.4%More Info >
Income Paid Quarterly. The objective of the Fund is to achieve increasing distributions on a calendar year basis with long term capital growth. The Fund may also invest in collective investment schemes. See latest fund factsheet for details.
Invesco Perpetual Distributionyes4.7%More Info >
Income Paid Monthly. Invesco Perpetual Distribution offers a balance between both income and capital growth through investment in UK based equities and fixed interest securities. See latest fund factsheet for details.
Invesco Perpetual Monthly Income Plusyes4.46%More Info >
Income Paid Monthly. Popular income fund that aims to achieve a high level of income whilst seeking to maximise total return through investing in high yielding corporate and Government bonds, together with UK equities. See latest fund factsheet for details.
Woodford Equity Income Fundyes3.50%More Info >
Our selected partner for investing in Neil Woodford's Equity Income fund is Barclays Stockbrokers, via their INVESTMENT ISA for new ISAs and ISA transfers, or their MARKETMASTER® ACCOUNT for non-ISA investments. Income Paid Quarterly.The fund’s investment objective is to provide investors with long-term appreciation through investing in stocks primarily listed on the UK stock exchanges. Up to 20% may be invested in international companies. The income objective is 10% higher than the FTSE All Share Index yield with an anticipated annual yield of 4.0%.
Newton Global Higher Income yes4.7%More Info >
Income Paid Quarterly. The objective of the Sub-Fund is to achieve increasing annual distributions together with long-term capital growth from investing predominantly in global securities. The Sub-Fund may also invest in collective investment schemes. See latest fund factsheet for details.
Jupiter Merlin Income Portfolioyes3.10%More Info >
Income Paid Quarterly. To achieve a high and rising income with some potential for capital growth by investing predominantly in unit trusts, OEICs, Exchange Traded Funds and other collective investment schemes across several management groups. The underlying funds invest in equities, fixed interest stocks, commodities and property, principally in the UK. See latest fund factsheet for details.
M&G Global Dividendyes3.27%More Info >
Income Paid Quarterly. The Fund aims to deliver a dividend yield above the market average, by investing mainly in a range of global equities. The Fund aims to grow distributions over the long-term whilst also maximising total return (the combination of income and growth of capital). See latest fund factsheet for details.
Kames Strategic Bond yes2.95%More Info >
The primary investment objective is to maximise total return (income plus capital ) by investing in global debt instruments,denominated in any currency, ranging from AAA Government Bonds through to high yield and emerging market corporate bonds. At least 50% of the fund will be invested in sterling and other currency denominated bonds hedged back to sterling. See latest fund factsheet for details.
M&G Optimal Incomeyes2.44%More Info >
Income Paid Twice Yearly.The fund aims to provide a total return to investors based on exposure to optimal income streams in investment markets. The fund invests across a broad range of fixed income assets according to where the fund manager identifies value. See latest fund factsheet for details.
*Current Income Yields are Gross, Variable and Not Guaranteed
**Historic Yield reflects distributions declared over the past 12 months as a percentage of the mid-market price of the fund.
*** This is the target yield the fund aims to achieve per year, it is not guaranteed and could change according to prevailing market conditions. The target yield is net of basic rate tax.
Information correct as at 08/02/2012.

The value of investments and any return from them can fall as well as rise and you may not get back the full amount invested. Please ensure that you read the Important Risk Information below.