A World DeFAANG-ed: High-Beta Bets and Emerging Markets
Kevin Muir, CFA, owner of Winter Capital Ltd., joins managing editor Ed Harrison to discuss the markets’ shifting focus, where Muir sees opportunities in the midst of the market rotation, and his thoughts on the relationship between deficits and bonds. Muir argues that the world is entering into a period of synchronized growth unlike anything we have ever seen before and that investors need to own assets in high-beta markets such as Canada, Australia, and emerging markets. He also explains why fiscal deficits are the private sector’s credit, why the market does not yet realize this, and the implications this has for yields. Key Learnings: In a world awash with low growth narratives arguing that further FAANGification of the market is in store, Kevin Muir makes a cogent argument for the opposite — synchronized global growth. Muir’s bullishness on high beta and EM highlights the markets’ rotation into cyclicals as an expression of their economic growth expectations into the new year. This sort of market environment is most beneficial to emerging markets and commodity-rich economies such as Canada and Australia.