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Q4 2020 Investment Market Outlook

Elections, Vaccines and Trade Deals. What's Not to Like?

As we enter the final quarter of what has already been a tumultuous year, a number of key issues for investors remain unresolved. There has yet to be a vaccine solution for COVID-19, the U.S. elections are almost upon us, and there still does not appear to be an EU/UK Brexit trade deal. There is plenty left in the remainder of this year for investors to consider!

This selection of papers offers insights across a range of asset classes, including precious metals, currencies and real estate. Other papers look at secular trends affected by the COVID-19 pandemic, while several look at the prospects for China over the long term.

 

binocular outlook

 

Q4 Outlook: Fasten your seatbelts, bumpier ride expected (Nuveen, 2020)

Nuveen’s Q4 2020 Outlook for markets envisages trickier times ahead, particularly for income investors.

Post-Crisis Narratives that will Drive Financial Markets (Amundi, Sep 2020)

For compliance reasons, this paper is NOT accessible in the United States

Amundi wonders whether investors are prepared for a changing narrative in a post-COVID-19 world, and argues for an approach that encompasses both flexibility and liquidity in order to be able to take best advantage of future opportunities.

10 Investment Themes for the Next 10 Years (Capital Group, Aug 2020)

For compliance reasons, this paper is only accessible in the UK & Europe

Capital Group looks further ahead than most commentators in this piece. Many of the ideas and themes they propose are those that are currently underway, but have been exacerbated or accelerated by the COVID-19 crisis.

Q4 Investment Outlook: The Road Ahead (KKR, Oct 2020)

KKR explores the long-term implications of the US-China relationship and argues that opportunities still exist in Asia, provided one can take both a local and global approach. They also examine the implications of the Fed’s shift to an average inflation target (AIT), arguably the most significant move in Fed policy since quantitative easing (QE) was introduced.

China – Adjusting the lens (Bailie Gifford, Sep 2020)

For compliance reasons, this paper is only accessible in certain geographies

Baillie Gifford is another asset management house that sees the long-term investment merits that may be associated with exposure to China. Some of these investment trends they believe are secular in nature, and may persist for decades.

Silver Outlook to Q2 2021: A phoenix arising (WisdomTree, Jul 2020)

For compliance reasons, this paper is only accessible in the UK & Europe

WisdomTree looks at the prospects for silver in the light of gold’s recent moves, and argues for an even more pronounced gain, despite it being more of an industrial metal whose usage can be dictated by how well or poorly the global economy is doing.

Listed Real Estate: Outlook & opportunities (FTSE Russell, Sep 2020)

This webinar from FTSE Russell focuses on the listed real estate sector, as the COVID-19 pandemic has reset the agenda for investing in real estate. As always there will be winners and losers , but having the luxury of a listed instrument (a REIT) allows some investors the flexibility of liquidity that hard real estate asset owners may not have.

Q4 Global Currency Outlook (RBC GAM, Sep 2020)

RBC GAM’s Currency Outlook focuses on the recent decline in the US dollar. They outline both structural and cyclical potential negatives for the currency, suggesting that they could see the trend continue for an extended period.

Global Investment Views (Amundi, Oct 2020)

For compliance reasons, this paper is NOT accessible in the United States

Amundi highlights a number of key divergences in markets that they think investors should take note of, particularly around perception versus economic reality. They also suggest that to be forewarned may enable exploitation when the time arises.

Beyond Coronavirus: The future of the corporate world (NN IP, Sep 2020)

NN Investment Partners wonders what a post-COVID-19 landscape might look like, with a return to the pre-pandemic ‘good old days’ looking increasingly unlikely. A significant shift in the corporate landscape has occurred, due to a seismic change in consumer behaviour and attitudes. In order to cope with a changing environment, companies need to be evolving too, by changing their processes, or by introducing new technology.

Video: Covid-19 and global supply chains (Wellington Management, Sep 2020)

In this webcast, Wellington Management strategists investigate the effect of COVID-19 on global supply chains and discuss its impact. Consideration is given to issues including ‘peak China’ and the role that digitisation and localization might play in global supply chain management of the future.

Alternative Investments? Consider Real Assets (Franklin Templeton, Sep 2020)

For compliance reasons, this paper is only accessible in the EMEA region

Franklin Templeton make the case for alternative assets as part of a well-diversified portfolio post-COVID-19, especially when the prospects for inflation are uncertain. The authors argue for some consideration to be given to some atypical allocations, including precious metals and insurance-linked securities.

Aging and Equities: Long-term stock sellers (Enteprising Investor blog, 2020)

In a longer-term outlook discussion paper, this Enterprising Investor blog highlights the implications of demographic trends on equity valuations, particularly amongst the populations of ageing, developed economies. The elderly cohort tend to be net sellers of stocks; fortunately significant population growth declines are not expected until after 2050.