Protect your AI investment, dead cat credit bounce, and the emerging safe haven asset you might not own
Here are the top 3 insights for May 13th, prepared by Alister, our CTO.
- EY: Three ways to protect your AI investment from a winter of discontent
- Robeco: The outlook for credits: Dead cat bounce
- UBS: The emerging safe haven asset you might not own, but probably should
- Touted as the “new electricity”, AI is expected to transform every industry — spawning new products and services, unlocking new efficiencies, creating new business models, driving new profit pools and delivering significant financial and human value.
- Expectations of, and enthusiasm for AI has reached a new high, gaining a prominent position in the C-suite and with governments as part of their broader digital transformation efforts.
- But we have seen this fanfare around AI before; first from its inception in the 1950s to the mid-70s and subsequently from 1980 to 1987.
- Both periods were followed by an “AI Winter” — a period where funding declined, interest waned and research in the field went underground.
Genuine Scores for the top 3 IT Service stocks
- Perspecta, 67
- DXC Technology, 64
- Western Union, 62
- We see the current rally as typical of bear markets.
- At this stage in the cycle, the biggest risks are weakening earnings and, eventually, downgrades (investment grade) and defaults (high yield).
- We think this is now playing out as evidenced by the many profit warnings that have been issued.
- So why have markets bounced so vigorously?
- A dovish Fed shift, expectations for a China trade deal and the backdrop of an oversold market late last year all help explain.
Genuine Scores for top 3 Globally focused Bond funds
- PIMCO Short Asset Investment Fund, 100
- Pioneer Multi-Asset Ultrashort Income Fund, 99
- DFA Two-Year Global Fixed Income Portfolio, 99
- While emerging markets bonds sold off in 2018, China government bonds outperformed;
- Over a long-run time period China government bonds are showing all the traits you’d associate with safe haven assets;
- We believe their position as a flight-to-quality asset will grow as China continues to reform, the index inclusion process progresses, and the RMB takes on a larger global role as a reserve currency.
Genuine Scores for the top 3 Greater China focused funds
- UBS (Lux) Equity Fund— Greater China, 62
- Schroder ISF Greater China, 56
- First State Greater China Growth, 56
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All the best,
Alister and the Genuine Impact Team
p.s. all Genuine Scores are accurate as of the 8th of April