Cogence: Dynamic investment approach key amid sensitive global markets

Cogence, a discretionary fund manager, continues to see opportunities in developed equity markets, particularly the United States. Despite the sensitivity of global markets this year, a dynamic and granular investment approach is deemed crucial. Kerri-Ann Sattary, an Investment Specialist at Cogence, shed light on the investment outlook, emphasizing the momentum in the U.S. equity markets with a close partnership with BlackRock for strategic asset allocation advice. The rise of AI as a transformative force driving the economy has propelled large cap mega names in the U.S., signaling further growth in the coming months. European markets have also shown promise, with sentiment improving and fiscal policies becoming more pro-growth. As market volatility continues, separating signals from noise remains a challenge. The team at Cogent and BlackRock navigate through geopolitical events, such as tariff impositions and economic transitions, with a focus on long-term structural trends rather than short-term market fluctuations. While concerns about a U.S. recession loom, positive indicators like job creation and robust corporate earnings provide optimism for sustained growth. Structural mega-trends like AI adoption and demographic shifts shape the investment landscape, with a diversified portfolio strategy being a key focus. The performance sustainability of Europe's market performance hinges on factors like the European Central Bank's rate cuts and increased defense spending, presenting an attractive investment opportunity compared to the U.S. Emerging markets, like India, demonstrate growth potential driven by demographic advantages and productivity enhancements. South Africa's improving business sentiment and collaboration efforts point towards positive market sentiment, with opportunities emerging in local bonds. The relationship between South Africa and the U.S., particularly regarding AGOA, remains crucial for economic stability. As interest rate expectations and inflation concerns influence global markets, the Federal Reserve's monetary policy decisions carry implications for international regions. Market expectations of weaker U.S. growth may lead to policy rate cuts, but balancing growth support with inflation control remains a challenge. Higher post-pandemic rates and bond yields could reshape the macroeconomic landscape, necessitating portfolio managers to maintain style neutrality for sustainable returns in varied market conditions.