Hopes and fears for 2017

James Faulkner interviews Chris Darbyshire, Chief Investment Officer at Seven Investment Management.

James Faulkner: Hi Chris. Thanks for taking the time to speak with Master Investor today. Could you kick off by giving our readers a brief summary of 7IM and its offering to clients, as well as an overview of your role at the company?

Chris Darbyshire: Hi James. 7IM runs a number of “multi-asset” funds – seeking diversification both by the types of assets invested in and by their geographic location. Each fund has a different level of risk and an expected return commensurate with that risk.

We are very diligent in our estimates of what levels of return investors can expect from the different levels of risk, and we make these estimates available to clients, which helps them to plan their savings strategies. We put a big focus on the types of assets we hold, and often try to invest passively (at minimal cost), believing that asset allocation is the primary driver of investment return rather than active stock-picking or market-timing.


My job as CIO is to manage the investment team, where asset allocation and implementation decisions are agreed collectively.

JF: In your note to clients entitled “The Year Ahead 2017”, you say you feel there are “enough widespread positives” for global growth to continue at a healthy level in 2017. But if we do start to see so-called “emergency” monetary policy measures curtailed and, eventually, reversed, won’t markets take fright? Have we become too comfortable with zero interest rates?

CD: Low rates and unconventional monetary policy have underwritten consumer spending and company balance sheets – in this respect they have helped to stabilise economic conditions and financial markets. Provided central banks switch to more conventional monetary policy at a time when economic conditions are improving, markets will take things well.

At the end of the day, economic growth and profits drive markets directly, whereas interest rates only have a very indirect effect. As long as those two drivers continue to improve investors will find good stories to focus on….

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