Populism was a popular topic at The Summit for Asset Management (TSAM) in London last month.
A panel of chief economists opened proceedings at the event by discussing major factors affecting the buy-side in today’s industry. Megan Greene, of Manulife Asset Management, said that “all of us” can agree that we’re in the late stage of a business cycle, but added that it could be one that lasts a long time, especially because of disruptions.
A few things have shifted how we consume and invest, she added. We are experiencing an oversupply of a number of factors, including labour, debt and capital. Two thirds of what we consumer are services, as opposed to goods. Without wage growth, there won’t be growth in inflation, added Greene. We’re stuck in a low growth, low-inflation economy.
Phillipe Waechter, of Natixis Asset Management, asked whether it was necessary to boost global growth when 2016 and 2017 showed steady improvement in almost all areas.
“We have already seen some imbalances and will probably see some inflation,” he added. Every country wants to do its own recipe for trade, which is a source of disruption that will be quicker than what is expected.
Larry Hatheway, from GAM, added that the atmosphere amongst asset managers is similar to that surrounding the 2008 crisis. While it might not be as much of a historical moment, he quickly clarified, repercussions will still be important for the buy-side.
There should be some concern that monetary policy, driven by populist politicians, is behind the curve. “People shouldn’t assume that this time will be different”.
Read the full report TSAM Series: Trends in Asset Management, here.