Name: As goes January, so goes the year. Will 2023 be a stormy one?
Uploaded: 2023-02-01T12:59:07.103291+00:00
Duration: 1033 s
Channel: Master Investor

Master Investor

Master Investor’s Sarah Lowther and Jonathan Davis discuss the investment themes that have started to materialise this year. 
 
With some equity market indices approaching or breaking through their 200 day moving averages, is this potentially a positive sign for the rest of 2023? 
 
Davis talks about the phenomenal success of passively managed funds over the past two decades, and names the active fund managers who deserve honourable mentions.   
 
Inflation in the UK is discussed. Will it return to the Bank of England’s 2% target and why is BOE Governor Andrew Bailey eating humble pie?
 
And discover why Davis says this is the year that the trip to the US should be a vacation destination and the Western Isles shouldn’t.

Master Investor’s Sarah Lowther and Jonathan Davis discuss the investment themes that have started to materialise this year. With some equity market indices approaching or breaking through their 200 day moving averages, is this potentially a positive sign for the rest of 2023? Davis talks about the phenomenal success of passively managed funds over the past two decades, and names the active fund managers who deserve honourable mentions. Inflation in the UK is discussed. Will it return to the Bank of England’s 2% target and why is BOE Governor Andrew Bailey eating humble pie? And discover why Davis says this is the year that the trip to the US should be a vacation destination and the Western Isles shouldn’t.

The state of the equity markets

The role of inflation

Active vs passive funds

Active fund managers to watch

https://d3ev5earl6dvd0.cloudfront.net/public-media/videos/005/684/005684/video_0outlma.mp4

Jonathan Davis sees some encouraging signs in the equity markets in early 2023, such as many equity market indices having either approached or broken through their 200-day moving average. He stresses that 2022 was a particularly bad year, though, and as a result, many investors are still a long way from making back what was lost over the course of 2022.

Sarah Lowther and Jonathan Davis agree that the peak of inflation has been reached. Jonathan Davis stresses that the key question is how fast inflation is going to come down; this will depend on both interest rates and the economy.

Jonathan Davis highlights that passive funds have increased their share of the equity fund market for the last 20 years, and have continued to outperform actively managed funds over that period as well. In 2002, for the first time since the Great Financial Crisis, actively managed funds outperformed passive funds again, and Jonathan Davis could see a similar performance in 2023.

Jonathan Davis believes index funds to be a good option in order to get core exposure to the US market. In the UK, he points out the attraction of small-cap fund managers, and highlights Henderson Smaller Companies, Henderson Opportunities Trust, Odyssean Investment Trust, BlackRock Smaller Companies, Aberdeen UK Smaller Companies Growth Trust as funds to watch in the investment trust sector.