Where Anchor Capital is putting its money in 2020

Anchor Capital has released its strategy and asset allocation for the first quarter of 2020, signaling a cautiously optimistic outlook for the global economy. The asset manager believes that the global economic expansion has exceeded expectations, easing fears of a looming recession. However, not all countries are reaping equal benefits, with emerging markets poised to outperform developed nations in the coming year. Nolan Wapenaar, Fund Manager at Anchor Capital, shared insights on the company's views and market outlook with CNBC Africa. Wapenaar highlighted several key factors shaping their investment decisions for the year ahead. The resolution of major uncertainties such as Brexit and trade tensions between the US and China towards the end of last year has created a more positive market environment. In addition, the ongoing accommodative stance of global central banks is expected to provide strong support for risk assets. These factors have contributed to a 'relief rally' in markets since December. Anchor Capital's asset allocation strategy reflects a diversified approach to navigate the current market landscape. Wapenaar emphasized the importance of maintaining a balanced portfolio across various asset classes. With global equities appearing fully priced and uncertainty lingering, the firm is cautious in its approach. They are leaning away from companies reliant on the South African economy for growth, anticipating a challenging operating environment. Similarly, Anchor Capital is slightly reducing exposure to US and global interest rates, where returns may fall short of expectations. When it comes to South African equities, Wapenaar underscored the risks associated with investing in companies tied to the local economy. While some sectors like commodities offer attractive opportunities, others face headwinds. He pointed to factors such as Eskom's challenges, low consumer confidence, and regulatory hurdles as significant risks for South African-facing stocks. Wapenaar highlighted the need for a credible resolution to the Eskom crisis as a crucial factor for restoring investor confidence. Despite the headwinds facing the South African economy, he acknowledged pockets of strength in certain companies with offshore earnings. As investors weigh their options in the current market environment, diversification and a cautious approach to asset allocation are key themes to consider. With emerging markets expected to outshine developed economies in 2020, Anchor Capital's strategy aims to capitalize on these opportunities while managing potential risks effectively.