Floquet remains bullish about the
US in general and the healthcare
sector in particular. “Certain biotech
companies have made dramatic
breakthroughs in treatments for
diseases such as cancer,” he says. In
addition, the sector overall should
benefit from ‘Obamacare’, the US’s
mandatory health insurance.
Flagship’s investments in this
space include Celgene, which
manufactures cancer treatments,
and Allergan, which develops eyecare and other products.
While Flagship is biased
towards developed markets
(including a small exposure to
Japan), Coronation’s offshore
allocation leans towards the
emerging markets.
“Four or five years ago emerging
markets were trading at a huge
premium, but asset prices have
collapsed and there is opportunity
there,” says Chester.
The second half of the year should
be more positive, with both
managers betting that markets
will end the year up. Driving forces
remain accommodative monetary
policy and the stimulus from lower
oil prices. The US is growing, Europe
is starting to improve and so is
Japan, says Floquet. “Even China will
start to look interesting - the Central
Banks recent measures [devaluing
the yuan, cutting interest rates and
lowering the bank reserve ratio] will
start to pull through in time.” ■
Winston Floquet, head of investments Flagship Asset Management
Neville Chester, portfolio manager Coronation Fund Managers
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ISSUE 6 – SEPTEMBER 2015