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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.

trail runner

Mid-Year Outlook and Scenario Update (NN IP, Jul 2021)

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.

Credit Outlook: A dynamic restart (BlackRock, Jul 2021)

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

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.

Ahead of the Curve, Q2 2021 (Federated Hermes)

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.

Covid One Year On: Capital markets in uncertain waters (CFA Institute, Jul 2021)

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.

Investment Implications of Covid-Induced Debt Overhang (PGIM Fixed Income, 2021)

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.

Fixed Income Multi-Sector Asset Allocation Outlook Q3 2021 (Invesco)

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.

Positioning Your Portfolio Post Covid (Mercer, 2021)

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.

Guide to Emerging Markets Investing (Robeco, 2021)

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.

Quarterly Webcast: Uneven reopening ahead (Blackstone, 2021)

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.

Emerging Markets Q2 Market Review and Outlook (MetLife IM, 2021)

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 taken at the height of the pandemic.

Why This 'Value' Recovery May Have Only Just Begun (T. Rowe Price, Jul 2021)

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

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.

 
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