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and Japan. The improved economic cycle emerging debt, expecting it to outperform
should benefit emerging markets. Relative to foreign currency debt on the back of higher
large caps, we moved to an overweight position yields and scope for currency appreciation. We
Top 10 April 2009
in small caps from a neutral stance. The continue to prefer global convertible bonds to
Top 10 Buy Top 10 Sell
economic cycle remains negative for small caps those from Europe where cash-rich companies
1 Citigroup Bank of America
for now, but massive monetary and fiscal do not need to issue convertibles. Overall, we
2 Fortis Allianz
stimulus on the part of the authorities to foster are neutral on convertibles.
3 Bank of America Citigroup
an economic recovery should be positive. Real estate is attractively priced on average
4 Arcelor Mittal Fortis
Small-cap valuations are also relatively after the asset class (small underweight) was hit
5 Royal Bank of Arcelor Mittal
attractive. disproportionally by the financial crisis.
Issuance of investment-grade corporate bonds However, deleveraging and the global recession
Scotland
was strong in the first quarter. Yields fell as remain negatives. Commodities (overweight)
6 Barclays General Electric
investor risk appetite improved. With the have started to anticipate a stabilising global
7 General Electric Barclays
market returning to some normality, we still economy. Also, low prices led to the
8 KBC Wells Fargo
think the relatively high yields offer investors a postponement and cancellation of investment
9 Commerzbank RBS
good risk/return trade-off. Furthermore, large projects, which could lead to scarcity in the
10 Dexia ING
spreads make investment-grade attractive longer term. Our outlook for a lower dollar is
compared with government bonds. We have another positive for the asset class. DISCLAIMER
stuck to our large strategic overweight. We This document has been prepared solely for
remain neutral on high-yield bonds. Investors Internaxx Top ten buys and sells informational purposes and does not constitute
could be too complacent towards high-yield. –International Investors Activity an offer to buy or sell, or a solicitation of an offer
Many issuers are highly leveraged and debt summary from Internaxx to buy or sell any security or financial
refinancing could become a problem. instrument, or any investment advice. Prospective
We consider emerging markets bonds The 2008 Top Ten buys and sells are measured investors should conduct such investigations as
attractive given the improved fundamentals as the total number of trades carried out in deemed necessary and should seek their own
–current accounts, debt ratios, foreign each stock by Internaxx clients over the legal, accounting and tax advice to determine
exchange reserves—and overweight the asset previous year. This report is not a independently of the suitability and consequences
class. We are overweight in local currency recommendation to buy or sell these stocks. of an investment.
June 2009 Investment International www.investmentinternational.com
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