20 February 2018
Economic forecasts are losing their lustre - which is why we think this Analyst Survey is so valuable. It forms a forward-looking assessment of sectors and regions that is rare among investment surveys for being built entirely from the bottom up.
Our equity and credit analysts conduct 16,000 company meetings throughout the year, talking to CEOs, CFOs and division heads. The survey provides an aggregate measure of sentiment based on that access as well as a wealth of proprietary analysis of the companies they cover. The research allows our team to identify trends as they emerge and this report captures their individual insights to build a rich, company-driven outlook for economic regions and industry sectors.
In building this picture of what’s really going on, we are not swayed by market sentiment which pushes and pulls at company valuations. Instead we focus on the underlying business conditions that determine companies’ successes and failures. We take a medium-term view on the companies’ ability to evolve and grow, and the hurdles they face.
The 2018 survey was conducted in December and had 162 responses.
A note from Paras Anand, CIO Equites, Europe:
Whilst the Survey is always an interesting barometer, I believe that it carries a growing significance. One phenomenon that we are seeing as a result of an increasing amount of money being deployed in index trackers and other rules-based strategies is the market acting less as discounting mechanism today than it has at any point over the last few decades.
This is compounded both by the fact that many of the key economic statistics being used by asset allocators (and central banks) are proving less effective in reflecting our rapidly evolving digital economy and are also, by their very nature, backward-looking and prone to material revision.
Against such a backdrop, the intelligence and insight garnered from pulling together thousands of individual company-level observations can act as a better guide to the real economy than statistical models carried over from the last century.
One thing feels almost for certain: the uncharacteristically low market volatility that we saw through 2017 seems unlikely to continue and we hope that the Analyst Survey makes a valuable contribution as you plan your strategies for the year ahead.
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