InPerspective - Volume 4

The explanations for disorder on England's high streets in August have been varied and inconclusive, but those for the summer's pandemonium in financial markets seem clearer: the increasing jeopardy of the European debt crisis, the political gridlock in negotiations over the raising of the federal government's debt ceiling, credit-rating agency Standard & Poor's subsequent downgrading of US debt, and mounting evidence of a slowdown in the recovery of the global economy which, according to the International Monetary Fund, is entering a "dangerous phase".

In the first article of this edition of inPerspective, we explain our outlook on economies and financial markets, and we discuss the implications of that outlook for our management of portfolios. In today's highly interconnected financial markets, which are distorted by policy settings and hugely influenced by leveraged speculative flows, very real risks appear to exist for investors. We continue, however, to believe that the perspective provided by our themes and investment process will help us navigate those risks on behalf of our clients.

In our second article, we explore developments in the global telecommunications sector, and we explain how our themes, particularly 'networked world' and 'smart', are helping us to assess investment opportunities and risks in that sector.

We hope you enjoy this edition of inPerspective.