By Nick
Hedley
Amid fears
of a full-blown recession in advanced economies, Lonsec Investment Solutions’ Chief
Investment Officer Lukasz de Pourbaix says Australia will hold up better than
most.
“The risk
of a global recession is elevated as the lagging impact of higher interest
rates is yet to come to the fore,” de Pourbaix said in a note.
However,
Australia’s large energy and materials industries will likely shield the local
economy from a deep recession, he said. “Our base case is that if we do go into
a technical recession, it will be mild relative to other regions.”
In August, Australian
equities bucked the broader sell-off in financial markets, driven by the
materials and energy sectors, de Pourbaix said, adding, however, that
diversification was an important strategy in the current volatile market.
He said
opportunities would open up in the equity market due to the indiscriminate
sell-off, while bonds were becoming attractive for the first time in nearly a
decade.
“The
forward-looking risk return profile for the asset class is looking very
different than the prior 10 years,” he said
Lonsec
provides investment research, ratings and implemented solutions to the
superannuation industry and other investors.