The world economic crisis has accelerated the globalization of finance at least in the eyes of many investors. Asset managers that once focused primarily or even exclusively on the U.S. have been compelled to look beyond its borders not only to keep abreast of developments overseas that could affect American markets the Arab Spring and Europes sovereign-debt debacles, among others but also to avail themselves of better opportunities that exist in other countries.
Our clients, particularly the larger ones, are global, explains Noelle Grainger, J.P. Morgans head of U.S. equity research. They might not be investing truly globally, but they have to think about issues globally, and its important to make sure that were driving our strategic initiatives in that direction as well.
This broader focus applies to corporations as well as countries. Stuart Linde, head of global equities research at Barclays Capital, offers one example. Consumer staples is a big global business, he says. If youre covering General Mills, if youre covering Kraft, you need to know whats going on at Nestlé. If youre covering P&G, you need to know whats going on at Unilever, he explains, comparing U.S.-based consumer goods companies with their European peers.
Theres another reason, notes Stephen Haggerty, head of Americas equity research at BofA Merrill Lynch Global Research. The U.S. is becoming a more mature market, he observes. Our economic growth rate is not going to be off the charts for the foreseeable future, given what has to happen to restructure the U.S. economy. Its harder to find alpha if you are just looking at the U.S.....