November 20, 2015 / 10:14 PM / 2 years ago

Highlights Day 5: U.S. equities to gain, Japan a top pick

NEW YORK (Reuters) - Erin Browne, portfolio manager at Point72 Asset Management, said U.S. equities could deliver high single-digit returns next year, while Mark Burgess of Columbia Threadneedle Investments EMEA said Japanese stocks were his top pick.

Those were some of the highlights from the final day of the Reuters Global Investment Outlook Summit, where investors spoke on topics such as the impact on markets of a potential U.S. Federal Reserve rate hike in December and their top investment plays for the coming year.

ERIN BROWNE, portfolio manager at Point72 asset management.

Browne said the Fed’s emphasis on a gradual path of rate hikes and moderate economic growth could lead to high single-digit returns for U.S. equities next year.

“The Fed wants to, at least at first, to take a very prudent approach to how it’s thinking about tightening, and that’s actually not a bad backdrop for stocks,” Browne said.

Browne, who said she expected the Fed to hike in December, which would be the first rate increase in almost a decade, said the pace of future rate hikes was more important than the exact date of when tightening begins.

“At this point, the market actually just wants the Fed to go because I think they just want to get over it, get over that hump and start talking about what really matters, which is growth and inflation trends,” she said.

MARK BURGESS, chief investment officer of Columbia Threadneedle Investments EMEA

A British vote to leave the European Union could see Frankfurt make a “land grab” for a slice of London-based foreign exchange trade in the euro, Burgess said.

“It could be very bad news for the financial services industry because much of forex trade in the euro that takes place here, were we to be outside the zone, I think there would be a land grab and I wouldn’t blame Frankfurt for doing that,” he said.

He also said a combination of central bank cash and shareholder-friendly actions by companies, including share buybacks and a focus on return on equity, made Japanese stocks the top pick.

Reporting by Svea Herbst-Bayliss, Lawrence Delevingne, and Nigel Stephenson

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