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Greece 's Economic Impact On The Global Economy

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Developed-market economies have been improving incrementally. After going through a soft patch in the first quarter, the U.S. has regained its momentum in job creation, although the quality of those jobs is open to debate. Europe has turned a corner, with GDP expanding modestly and deflation subsiding. Japan is also experiencing a notable uptick in economic activity. Emerging markets, on the other hand, are going through what the World Bank has called a "structural slowdown." This is likely to last for years as a result of a variety of factors including lower commodity prices and a falloff in global trade following the global financial crisis. India appears to be one of the few exceptions, with a first-quarter growth rate that has exceeded…show more content…
A prolonged bear market could slow it further, and that would affect the global economy negatively. While we are in the midst of a recovery, it remains in the context of a high-risk, slow-growth world. Government debt as a percentage of GDP has risen substantially since the financial crisis and is acting as a drag on economies. Ultimately, growth in real GDP depends on growth in the workforce and growth in productivity; neither appears promising. Given that backdrop, the portfolio remains invested in companies that have proven that they can grow their free cash flow, even in a tepid economic environment, and have a disciplined approach to allocating cash that will create value for shareholders.

Positioning

Epoch’s highest conviction ideas continue to be centered on companies where they have a significant degree of confidence in the business and identify ‘quality visible growth.’ Epoch remains focused on companies with strong cash flows supported by secular growth – in areas such as, productivity-enhancing technology and companies which will benefit from the proliferation of smart devices (the "internet of things"); commercial aerospace which will benefit from visible growth in emerging markets and a robust replacement cycle in developed markets; financial companies with improved capital positions and greater cash flow visibility; and companies which will
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