Genesys Fund – Examines Growing US Interest in Investment Abroad
PORT VILA, VANUATU / ACCESSWIRE / May 31, 2018 / The strong performance of all the world’s major economies in early 2018 has given rise to the term “synchronous growth,” as countries continue to recover from the 2008 financial crisis. Genesys Fund notes that clients are paying increasing attention to developments beyond the US to maximize value in their investments. Although international markets comprise 60% of global public capital markets, the typical US investor’s portfolio only contains around 21% international equity and bonds, according to CNBC.
Reuters has reported that recent volatility in the US stock market has created incentives for fund managers to consider re-allocating capital to international bonds and emerging market stocks. Financial analysts have warned of a potential mismatch between fiscal and monetary policy, as the Trump administration attempts to stimulate the economy by implementing $1.5 trillion in tax cuts while the Federal Reserve considers raising interest rates to dampen borrowing. International markets can act as a balance to developments in the US, allowing fund managers to spread the risk over a diversified portfolio when domestic and global economies do not move in the same direction.
Another reason that investors are taking their money abroad is simply the impressive performance reported for some non-US companies. For example, the FAANG stocks, comprised of US corporations Facebook, Amazon, Alphabet, Netflix, and Google (with Microsoft added in occasionally) are usually coveted by investors. However, the rise of Chinese technology firms termed the BATs – Baidu, Alibaba Group and Tencent – have challenged the unquestioned appeal of FAANGs. In mid-2017, the BATs posted a 65% growth, compared to 31% growth for the US-based grouping.
Prospects of healthy growth in the global economy will also create more options for US investors when deciding where to send their capital. The International Monetary Fund expects that global economic growth will average 3.9% in 2018 and 2019, after a stronger than expected 2017. The uptick in commodity demand from emerging economies is a key indicator of industrial recovery. Although these economies have lagged the US in expansion in recent years, their long term outlook remains positive. Growing populations translate into increased demand for goods and services, while economic expansion will lead to a rise in demand for metals, minerals and crude oil. Growth in Asia alone is forecast to average 6.5% in 2018 and 2019, accounting for over 50% of the world total. The savvy investor will also integrate currency risk management into their international investment strategy, says Genesys Fund, since the depreciation of foreign currencies against the US dollar will erode profits gained from the international markets.
An investment hedge fund founded in 2016, Genesys Fund works with institutional and private investors in 82 countries, providing clients with multi-asset execution, prime brokerage services and modern trading technology. The firm manages a diversified portfolio comprised of financial products for options, futures, bond and forex trading. By creating proprietary analytical and accounting systems for risk control, the fund delivers a world-class investment offering to clients.
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