Chief global strategist
Assets under management: L348.6 billion ($505 billion)
U.S. GDP: 2.5%
S&P 500: 1270
Euro to dollar: 96 cents
Yen to dollar: 126
Hot sectors: commodities, consumer cyclicals, capital goods and cyclical parts of the technology industry
Adam Seitchik is bullish on Europe and emerging markets.
Mr. Seitchik's view is based on his strong belief of a recovery in certain cyclical stocks.
"On balance, we are looking to have more cyclical exposure," he said.
DeAM prefers to focus on stock picking rather than making sector bets, but Mr. Seitchik does believe commodities, consumer cyclicals, capital goods and cyclical parts of the technology industry such as semiconductor producers will lead an economic recovery this year. He warned, however, that some of these sectors already had done well and an economic recovery might already be priced in.
Mr. Seitchik expects the United Kingdom to be the strongest performing economy in 2002, as it has suffered less in the technology-led cyclical downturn of the last few years. The flip side, however, is the U.K.'s relatively low exposure to the technology sector could keep it from being one of the best performing stock markets this year.
Mr. Seitchik expects the eurozone countries and emerging markets to be the best performing markets. "The eurozone tends to be a more cyclical market in terms of the nature of stocks and the investor base." European investors generally are skittish and are likely to move quickly into cyclical stocks, which will push prices higher.
He is very bullish about prospects for emerging markets, which he calls "the ultimate cyclical asset class."
"The best time for them (emerging markets) is usually when international interest rates are bottoming and we are emerging from recession," Mr. Seitchik said. He believes the general lack of investment across emerging markets during the technology boom means fundamental returns from emerging market companies will be better than those in developed markets.
In the United States, leading indicators such as inventory levels and unemployment already are showing the beginnings of a recovery, he said. He is bullish on U.S. equities - small caps in particular.
He is more circumspect about U.S. bonds, however. He expects to see a fall in bond yields as the economy improves but throughout the year DeAM will be interested in increasing its exposure to corporate and high-yield bonds.