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State Street positions for weak recovery

Date: 22 Nov 2009

Global chief investment officer Richard Lacaille says State Street Global Advisers is overweight on equities from a bottom-up perspective and also on investment grade credit. Just don’t ask him to forecast the gold price.

Keywords (click to search): [State Street Global Advisers] [Richard Lacaille] [inflation] [Tips]

Leigh Powell
Institutional investor State Street Global Advisors believes the global economic recovery will be relatively weak and that fundamental analysis will return to stock-picking in 2010.

Predominantly a conservative, passive investor, the firm typically favours quantitative techniques to evaluate markets in an effort to determine patterns.

On present metrics it finds that equities are fairly valued and in some cases offer better than fair value. It has been overweight on the asset class since last December, and turned overweight on investment grade credit this spring, swiftly followed by high-yield bonds.

Although it has wound these positions back a little, it still has a 2% overweight on emerging markets. It is effectively financing these views by taking an underweight position on treasury bonds and on real estate investment trusts (Reits) in the US.

In an interview in Hong Kong, Richard Lacaille, the firm’s global chief investment officer, told asiamoney.com: “If you are...

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