Global Investment Outlook: August 2021
Outrunning the Delta Variant
The outlook for investment markets during the remainder of 2021 is somewhat opaque, with the spread of the Delta variant?of the coronavirus among several issues that investors need to consider. Other factors include how the Federal Reserve reacts to high inflation numbers, and how growth in the U.S. economy and labour markets might impact the timing of the Fed's decision to taper.
In this selection of papers, top asset management firms offer their insights into how investors might respond to some of the challenges they may face. Asset allocation, the case for emerging markets and the ongoing 'value vs growth' debate are among the topics discussed.
NN IP’s paper outlines three potential scenarios for the second half of 2021. The outcome is going to be largely determined by how U.S. Fed policy evolves against a backdrop of high inflation numbers.
For compliance reasons, this paper is only accessible in the United States & Canada
Credit performance was mixed in the first half against a backdrop of accelerating growth and strong monetary and fiscal support for the economy. BlackRock remains positive, with a watchful eye on inflation trends and a focus on selectivity, embracing complexity and global opportunities.
For compliance reasons, this paper is only accessible in certain geographies
Federated Hermes’ Silvia Dall’Angelo, Senior Economist, offers a macroeconomic viewpoint and examines several key themes: building back better, inflationary concerns and the divergences that exist between developed and emerging markets.
This CFA Institute survey of its global membership base outlines how they view the key outcomes of the Covid period and how policymakers have reacted to it.
PGIM Fixed Income offers an analytical framework aimed at spotting the inconsistencies among emerging and frontier markets in their ability to withstand the risks of Covid-induced debt overhang. From this they identify several investment opportunities.
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For compliance reasons, this paper is only accessible in certain geographies
Invesco highlights their view of fixed income markets for Q3, in which they expect the rise in inflation to be transitory and central bank policy to remain relaxed much further along the cycle, which provides a supportive backdrop for riskier assets.
Mercer suggests that the stimulus packages used to keep the global economy turning during the height of the pandemic will eventually be felt, most likely in moderating asset class returns.
Robeco’s Guide to Emerging Markets (EM) is a comprehensive reference guide to the asset class and its risks and opportunities. It also examines sustainable investing within an EM content.
In this webcast, the redoubtable Byron Wien, Vice Chairman of Private Wealth Solutions, is joined by Joe Zidle, Chief Investment Strategist, Private Wealth Solutions, to discuss the state of the U.S. economy, global stock markets, and what future returns might look like for investors across asset markets.
In this paper MetLife IM expects that an emerging markets recovery story may take place in H2 2021, as countries begin to unwind some of the policy steps made at the height of the pandemic.
For compliance reasons, this paper is only accessible in the UK & Europe
Value investing saw a resurgence in investor interest in the final part of last year, compounded by the vaccine announcement in November. The trend continued into 2021, though recently, growth has come back into fashion as questions were raised about the durability of the cyclical rally. T. Rowe Price suggests that opportunities still exist, but investors may need to consider international markets rather than more expensive-looking U.S. markets.
ABOUT THE AUTHOR
Andrew Perrins is a former Actuary and Asset Allocator. After qualifying as an Actuary, he worked for 15 years in investment management, serving as Director of Asset Allocation for Abbey Life and for Chase Manhattan, before setting out on a more entrepreneurial path.
To contact him,?email?[email protected]