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Economic Growth Forecasts Augur Offshore Exposure
A recent slump in U.S. growth rates has started to spook investors again, prompting domestic indices to fall precipitously on Monday. Although I believe such market action is short- to medium-term, the differential between growth rates here and abroad should be considered.
According to the World Bank, developing economies will experience a growth rate of nearly five times our own. Although roughly one-half of all S&P 500 company revenues are from international operations, it still makes sense to earmark a portion of one’s equity portfolio to emerging markets. Even though volatility in these investments will likely be substantial, there is a good long-term case for investing directly outside the U.S.
About the Author
Ben Warwick, Quantitative Equity Strategies
Veteran investment strategist Ben Warwick brings 20 years of investment management expertise to AdvisorOne.com in his blog, Searching for Alpha. His market and economic insights provide readers with an insider’s view on generating alpha through asset allocation, the use of strategic portfolio “tilts” and alternative investments.
Ben Warwick founded Quantitative Equity Strategies (QES) in 2002 as a platform for implementing his quantitative investment strategies. The firm manages assets with traditional long-only equity and fixed income, private equity, managed futures and alternative investment mandates. QES has developed an industry leading expertise in building investment programs that can replicate alternative returns, while offering daily liquidity and transparency. These products include the HFRq, a hedge fund replication strategy developed in concert with Hedge Fund Research in Chicago; the Managed Futures Beta Index, with Aspen Partners; and the Nomura QES Modeled Private Equity Returns Index (PERI), which was developed with Nomura Bank and Preqin, the leading source of information in the private equity industry.
He is the author of several books, including "Searching for Alpha: The Quest for Exceptional Investment Performance," (Wiley, 2000) and "The Handbook of Managed Futures," with Carl Peters, (McGraw-Hill, 1996). He can be reached at ben@qesinvest.com.
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