On Wednesday, KBL European Private Bankers S.A. delivered a perspective on the world of investment in which 2016 will see further diversification of investors' portfolios.

Stefan Van Geyt, Group CIO, KBL epb, explained that the group engages three strategists as well as himself and the Luxembourg CIO, to work on the group's investment strategy throughout the year.

In an introductory history lesson, he explained that one of the first modes of payment was with salt, therefore the origin of the word "salaire /salary".

Nowadays, and looking forward to 2016, there are various non-traditional investment classes that are becoming interesting - alternative UCITS, real estate, private equity, etc.

On the issue of macro-economic level, he handed over to Ilario Attasi, CIO, Luxembourg, KBL epb, who presented an outline of the world outlook for 2016. He said that the world is currently experiencing a classical cycle of the USA leading the way out of recession and other economies including Asia, Japan and Europe following.

Europe is experiencing a growth of 2% due primarily to low energy prices. Ireland (5.5% - 4.1%) and Spain are leading the way in GDP growth, with both slowing down in 2016 from 2015 highs.

The US will see a 2.5% growth in 2016 thanks to a low unemployment rate. Online shopping in the US is expected to continue its significant rise

Regarding Japan, Stefan Van Geyt stated that the country has the ability to rebound economically due to dynamism in industry. The Nikkei 225 Index has continued to rise and the economy remains interesting for investment.

China's economic growth has been based on manufacturing and exports, but the country is currently addressing an evolution to services.

On emerging markets, he stated that despite an increase in consumer demand risks still remain. He also stressed that there is not just one emerging markets and all are different. By way of diagrams he illustrated that the GDP in China last year was the same as in South Korea in 1987.

Ilario Attasi explained that it is necessary to choose an approach for each market, with 8% or more growth in earnings, with emerging markets expected to offer in excess of 10%.

In the fixed income market, the opportunities experienced over the past 30 years are no more; nevertheless, there are still possibilities.

For the 2016 outlook, Stefan Van Geyt stated that commodities continued to fall in 2015, with oil prices expected to stabilise in 2016 at between 40 - 45 USD/barrel. The rise in value of the USD through 2015 is not expected to continue in 2016 and the EUR-USD exchange rate is expected to stabilise. He stressed, however, that if Donald Trump were to succeed in his attempt to become President of the USA, then the American markets would return to a period of volatility.

Ilario Attasi concluded that, in Europe, the telecoms and energy markets are expected to rise, along with the technology sector in the US.

In summary, the 10 Trends to Watch in 2016 are:

- CORRELATION CONUNDRUM: At a time when stocks and bonds are highly correlated, investors will increasingly rethink their approach to diversification

- ALTERNATIVE OPPORTUNITIES: Non-traditional asset classes are likely to hold special appeal in 2016 as part of a broader effort to achieve balanced portfolios

- EUROPE: Annual eurozone growth should approach 2% in 2016, supported by low energy and commodity prices, a relatively weak euro and attractive financing costs

- UNITED STATES: The US economy should expand by 2.5% in 2016, driven by a strong services sector, lower unemployment and slightly rising wages

- JAPAN: The Asian nation has the potential to rebound over the next 12 months because of changing policies and especially due to more positive corporate dynamics

- EMERGING MARKETS: Led by service-sector expansion and increased consumption, this year should mark the beginning of recovery for non-commodity exporting emerging markets

- EQUITIES: While the outlook for global equity markets is modestly positive, they will continue their roller-coaster performance; European and Japanese shares will prove most attractive in 2016

- FIXED INCOME: Following a 30-year bull run, the bond market appears to have finally run out of steam, but the asset class still offers some interesting opportunities

- COMMODITIES: After more than four years of decline, commodity prices may have finally hit bottom, but the climb back up will be slow, difficult and uneven

- CURRENCIES: The great dollar bull run of 2015 is unlikely to be repeated over the coming 12 months, leading to a more stable EUR/USD cross rate

KBL ebp employs around 2,200 staff, of which around 1,000 are based in Luxembourg.

Photo by Geoff Thompson: Stefan Van Geyt, Group CIO, KBL epb