Experts from Prudential Investments Management gathered during the 2016 Economic and Markets Outlook Event in New York City to give and discuss their insights on how 2016 investments will turn out.
Mike Lillard, chief investment officer for Prudential Fixed Income, has said that if investors are chasing for returns in 2016, equity is the place to be.
"In an environment where rates are going to stay low, what we feel from investors is that they need more return; they're desperate for return," said Lillard. "That's going to lead them to add risk to their portfolios over time. So, from a broad asset class perspective, the worst place to be is in cash and the best place to be is in stocks."
He quickly added that "there's lots of opportunity to add value" within fixed income in areas such as high-yield debt, especially with defensive sectors like utilities.
According to their press release in Business Wire, Peter Clark, a managing director and portfolio specialist for Jennison Associates, which manages $172 billion across equity and fixed income strategies, said that he likes the consumer discretionary, information technology and health care sectors, "where we see high levels of innovation and very powerful business models that are producing that very long duration higher growth, which is what the market continues to reward."
"I hope in 2016 we're a little more selective and treat emerging market equities not so much as an asset class, but instead think of it as a universe of opportunities--country, sector and companies," Clark added.
Peter Hayes, managing director and global head of investment research for Prudential Real Estate Investors, which has $62.6 billion in gross assets, has shared that there would be two themes heading in 2016.
"First is a lack of 'grade-A, quality real estate' in the United States and the United Kingdom, leading to a focus on major cities," explained Hayes. "We like active asset management--the repositioning, redevelopment, refurbishment of locations around the world."
"The change in 2016," said Ed Keon, managing director and portfolio manager, QMA, which manages $105 across a range of asset classes, said that he prefers returns from riskier assets over returns from safer assets. "...[is] that it may be time to rethink those currency hedge positions that worked so well at the beginning of 2015--and worked well recently--and invest directly in European equities and Japanese equities. And we think that, in the short run, it's really hard not to like the stronger dollar idea. But I have a feeling that's kind of getting close to running its course," said Keon.
