Summary
Our Mid Year Outlook investigates the myriad opportunities and challenges facing China today
The backdrop to this edition of Outlook is a political environment still capable of springing surprises. Last year we had the UK’s vote to leave the EU, then the election of Trump. 2017 has seen the youngest ever President of France come to power, when his year-old party, En Marche, swept up a massive parliamentary majority.
And Theresa May’s call for a snap election to provide a ‘strong and stable’ negotiating force for the UK has resulted in a hung Parliament and yet more political uncertainty. In honour of Macron’s victory we recall the phrase ‘plus ça change, plus c’est la même chose’. The more things change, the more they stay the same.
However exciting or concerning these events may appear, investors have become accustomed to change. Volatility in markets has been much lower than it has been historically. There are some technical reasons for this. Principally, however, shareholders are reassured that companies are delivering earnings growth amidst a backdrop of a stable global economic environment, and that generally speaking equities are better value than fixed income for the long term investor.
Our investment philosophy remains consistent – trying to find good assets at reasonable valuations. Uncertainties do abound – particularly political. It would seem foolhardy to predict the length of the Trump presidency and if and when the promised infrastructure spending and corporate tax reductions come to pass. The Brexit negotiations are also unpredictable, with a wide range of possible outcomes given the initial posturing by both sides. Whether hard or soft, or somewhere in between, the negotiations of a weakened UK Government will undoubtedly have dramatic twists and turns. However, life will still go on.
Our Mid-Year Outlook heads East to explore the myriad opportunities and complexities of China. It is a sign of our ever-changing world that the Middle Kingdom seems for now more predictable than the democratically-led political change we see in the West.
We hope you enjoy it.
Dickson Anderson
Head Of Investment

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Key Takeaways
China has grown dramatically in the past 30 years, the nature of the growth is changing but is likely to remain infrastructure led for many years to come. We have little direct exposure to China - we do not own or intend to own Chinese shares directly and most of our collectives are underweight in this region. We do, however, have plenty of indirect exposure - through holdings in Asian Banks, and companies in the healthcare, consumer and commodity sectors. We are mindful of the risks – for example debts are rising and demographics will be challenging
About Adam investments
We offer discretionary investment management to individuals and their families, and to charities. We take a long term approach to investing and we believe this gives us an advantage in a world where markets and media are increasingly focused on short term news.
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