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Global Investment Outlook: May 2021

Running Hotter than you Might Like?

Recent U.S. inflation data, which indicated the biggest rise in consumer prices since 2008, combined with comments about interest rate rises by Fed Chair Janet Yellen to put pressure on markets. Temporary relief from rate hike concerns was provided by a very weak U.S. jobs report, which brought into doubt the scope and scale of the U.S. economic recovery.

In this selection of investment outlook papers, several commentators look at potential portfolio inflation hedges, whilst others look beyond short-term market drivers for opportunities created not just by an economic rebound, but by forces driven by secular change.

steaming hot water tap

 

Multi-Asset Monthly Outlook May 2021: Metals – Anything but rusty (Robeco)

Robeco’s Peter van der Welle, Strategist in the Global Macro Team, believes the commodity bull run can continue based on several positive technical and demand-related factors.

Five Underestimated Forces in International Equities (T. Rowe Price, Apr 2021)

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

T. Rowe Price suggests investors are underestimating five global trends that could reshape portfolios in the post-pandemic era.

Global Investment Views (Amundi, May 2021)

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

Amundi advocates caution as the year progresses, particularly regarding areas of the market that may be in 'bubble territory'.

Market Update: Investors embrace the economic rebound (RBC GAM, Apr 2021)

For compliance reasons, this paper is only accessible in the United States and Canada

RBC Global Asset Management suggests we may be entering a new business cycle, as economic expansion is likely to run further, possibly for several years.

Equity Market Stress Monitor: Q2 2021 (Intech)

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

Intech offers their observations on five key market strain metrics which suggests potential instability in both developed and emerging equity markets.

PGIM Global Partners: Apr 2021 CIO Call (QMA)

Most participants on a recent PGIM Global Partners CIO call were optimistic about the outlook for markets. However, they identified inflation concerns, risks of further Covid-19 outbreaks, and a ‘taper tantrum’ as potential causes of market volatility.

Fixed Income Outlook Q2 2021 (BNP Paribas AM)

BNP Paribas Asset Management investigates the differential in what the Fed has suggested will be the likely trajectory of interest rates, and the assumptions made by the markets which are anticipating earlier intervention. How this issue resolves will be the key determinant of both bond and equity markets over the rest of the year.

Beyond CPI – Gold as strategic inflation hedge (World Gold Council, Apr 2021)

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

The World Gold Council's paper highlights the potential for gold as a measure of portfolio protection in a more inflationary environment.

Asset Allocation Outlook Q2 2021: The temperature is rising (Neuberger Berman)

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

Neuberger Berman’s outlook piece supports a pro-risk, pro-cyclical stance, though tempered somewhat to reflect what has been an ebullient mood in equity markets. They remain cautious of economic data surprises, which have the capacity to induce periods of market volatility.

Q2 2021 Global Fixed Income Outlook (Putnam)

Putnam Investments’ latest quarterly report suggests the Fed may begin asset tapering in H2 2022, which may leave the long end of the bond market looking potentially vulnerable, though opportunities may exist in high yield and parts of the mortgage market.

Time to Rethink Value Versus Growth (Capital Group, 2021)

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

Capital Group’s paper looks at whether value investing can make a comeback after many years in the wilderness. It notes some key secular changes which have affected the value vs growth debate, and the authors argue that tomorrow’s winners can come from both ends of the style equation.

Six Questions About the Market Outlook (LGIM, Apr 2021)

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

LGIM’s Strategy Team identifies key topics that could potentially derail what appears to be a positive outlook trajectory.

Bonds: Performance recap & Q2 2021 outlook (MetLife Investment Management)

MetLife Investment Management reviews the developments of Q1 2021 and outlines their outlook for short and intermediate duration bond strategies.

Emerging Markets: The post-pandemic promise (Franklin Templeton, Apr 2021)

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

Franklin Templeton outlines why it remains positive on the outlook for emerging markets generally, and more specifically China, over the medium term.

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