A BRAVE NEW WORLD INVESTMENT OUTLOOK 2021 - UBP
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INVESTMENT OUTLOOK 2021
MARKETING DOCUMENT
A BRAVE NEW
WORLD
A BRAVE NEW WORLD
2020 provided investors with a challenging roadmap which required
both agility and conviction to navigate.
An already slowing economy combined with a reluctantly accom-
modative Federal Reserve early in the year left investors facing
elevated valuations against a weakening earnings backdrop even
before the global pandemic fully took hold. The cautious stance we
adopted in January and February paid off, allowing UBP managed
portfolios to contain the damage wreaked by the shortest, sharpest
sell-off in equity market history.
With fiscal policy-makers joining central banks in the largest globally
Michaël Lok coordinated easing ever, we were able to swiftly align our portfolios’
Group CIO and Co-CEO positioning with that reflationary stance in the spring. Recognising that
Asset Management the effects of the ‘corona crisis’ and low yields were set to last led
to a large-scale adjustment of both our bond and equity allocations
as we offloaded the traditional ballast of multi-asset portfolios.
Similarly, amid the deepest recession since the Great Depression,
a focus on balance sheet strength and corporate quality helped
us navigate the early days of the crisis. Anticipating a wholesale
transformation of the structure of the global economy, we have
favoured transformation themes in healthcare and technology to
drive our equity allocations through much of 2020. Those secular
trends should continue to spread as economies seek to pick up in
the new year. The development of 21st-century infrastructure to
address climate change and a new digital landscape should take
centre-stage in this transition.
In 2021, a move from monetary-led to fiscal-led policy means shifting
political landscapes in the US, the UK, Europe and China will create
both opportunities and risks for investors. For bond investors, a
risk-managed approach will be prudent in the new year as defaults
resulting from the health crisis continue to materialise. Meanwhile
central banks are expected to be active, leading to a continuing US
dollar bear market and a gold bull market.
With low-risk government bonds no longer offering the same protection
as in previous recessions, investors will need to adopt a dynamic
risk management approach. Options, futures, and structured product
strategies remain an active part of the UBP arsenal in addition to hedge
fund, precious metal and forex strategies, to maintain our commitment
to preserving and growing our clients’ wealth in challenging market
conditions.
INVE ST ME N T O U T L O O K 2 0 2 1 | 3
CONTENTS
1
THE RISE OF FISCAL
2
THE US DOLLAR BEAR
ACTIVISM MARKET CONTINUES
Macroeconomic Outlook Currencies
page 6 page 10
3
WHERE TO NOW
FOR FIXED INCOME
INVESTORS?
Fixed Income
page 12
4
INVESTING IN
5
THE RISE OF CHINA
TRANSFORMATION
China
Equities
page 14 page 16
4 | INVES T ME N T O U T L O O K 2 0 2 1
6
PRECIOUS METALS:
VARYING TINTS
Commodities
page 18
7
A BRAVE NEW
8
EQUIPPED FOR
UNITED STATES THE WEATHER
US Elections Responsible Investment
page 20 page 22
9
STAYING ACTIVE IN
RISK MANAGEMENT
Alternative Risk Management
page 23
INVE ST ME N T O U T L O O K 2 0 2 1 | 5
1 MACROECONOMIC OUTLOOK
THE RISE OF FISCAL
ACTIVISM
Global growth should recover in 2021, with China, the US and Germany being the
main drivers. Monetary and fiscal policies are coming together to support a sustained
recovery; fiscal activism is likely to dominate with public spending driving efforts to
kick-start the economy.
A
ccording to our scenario, all EUR 750 billion or 5% of European In China, medium-term economic
countries should see renewed GDP – will result in effective support development targets will clarify the
growth in 2021. Economies for struggling countries and industries. country’s new policy direction in 2021.
have seen a gradual upturn since
summer 2020, although the China, Germany and the US are
resurgence of Covid-19 cases likely to see growth driven more by
and new local restrictions are investment and global trade. The
hampering the recovery at the end recovery from recession has been
of the year. After a deep recession,
all countries should bounce back in
New fiscal driven by firm consumer spending
and buoyant real-estate markets.
2021, and we expect global growth
of around 5% after a contraction stimulus plans The gradual fall in unemployment
in 2021 should keep consumer
of 3.2% in 2020.
will be required spending on a positive trend.
to support the
However, not all countries will The growth outlook depends on
recover to the same extent. China how well the pandemic is kept
recovery in 2021.
(+2% in 2020 and +7.5% forecast under control and on the early
for 2021), the United States (-4.2% arrival of a vaccine, which would
in 2020 and +4.2% in 2021) and improve visibility on the economic
Germany (-5% in 2020 and +5% cycle and prompt a reassessment
in 2021) have already rebounded of the economic scenario.
more quickly than other countries,
allowing them to make a larger
W O RL D G D P G RO W T H
contribution to the recovery. In the
rest of the world, economies are more 8 % U S & C H I N A C O N T RI BU T I O N
fragile – with a contraction of 4.7%
expected in 2020 outside the three 6
aforementioned countries, followed
World GDP growth
by growth of 4.3% in 2021 – and the
4
resources to underpin the upturn are
more limited.
2
The political landscape should be
more settled in 2021 after the final 0
result of the US presidential election
is established, giving us renewed
clarity on the direction of US economic -2
China
policy and the global economic
cycle. In Europe, the vote in favour US
-4
of the Recovery Fund – amounting to Other advanced
Other emerging
-6
2006 2008 2010 2012 2014 2016 2018 2020
Sources: IMF, UBP
6 | INVES T ME N T O U T L O O K 2 0 2 1
GOVER NM ENT DEB T output, so governments increased
their support, extended their plans (to
more than 12% of GDP in total) and
as % of GDP WWI WWII as % of GDP
140 140 offered state guarantees for certain
business loans (almost 10% of GDP
in developed countries).
120 120
As we approach the end of the
100 100 year, monetary and fiscal policies
are co-ordinated, with the adoption
Developed countries
80 80 of common goals. Efforts to boost
economies now involve expansionary
60 60 fiscal policies, which will be partly
monetised by central banks until
there is a return to full employment
40 40
or until inflation rises above 2%. As
Great
lockdown a result, there has been a major shift
20 20 in economic policy, which is likely to
Emerging countries Financial
crisis remain in place until 2025.
0 0
1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 Long-term growth prospects
Sources: IMF, Maddison Database Project
The pace of the recovery and the
duration of the growth phase are
However, growth remains fragile, financial assets and extended the list therefore likely to be determined
uneven between countries and of assets they can buy. There has by fiscal decisions taken in 2021.
between manufacturing and services, been aggressive monetary stimulus, Following on from emergency
and still needs to be carefully nurtured avoiding a financial crisis by
by economic policy. Sustained growth ensuring access to credit
in the global economy requires further and the normal operation of
fiscal support, especially in developed financial markets.
countries.
A new era of economic policy
Fiscal policy then picked up
the baton, with plans intended Fiscal
consolidation
to support public health, jobs
In 2020, central banks cut their policy and struggling industries.
has been
interest rates to zero or pushed them However, those measures
further into negative territory, injected appeared insufficient to
postponed until
liquidity, increased their purchases of address the slump in global
after 2024.
INVE ST ME N T O U T L O O K 2 0 2 1 | 7
m e a s u re s , w e e x p e c t u p c o m i n g maintain support for furloughing plans expected in China and in Japan, and
initiatives to focus on structural and certain sectors. EU countries will in the United Kingdom to accompany
spending that will have a knock-on present new stimulus plans in order its departure from the European
effect on medium-term growth. to access money from the European Union. Fiscal consolidation has been
Commission’s Recovery Fund: France postponed until after 2021–2024 in the
In practical terms, governments could has already put forward a EUR 100 major countries, including Germany.
allocate less money to providing direct, billion plan, Germany is proposing
short-term support to households more than EUR 90 billion of new debt, In 2021, we expect a shift towards
and certain sectors, and more to and Spain is preparing an EUR 80 structural programmes within public
stimulating investment. Public-sector billion programme. Other measures are spending, with a focus on investment
deficits should be lower next in infrastructure, new technologies,
year (6% in 2021 after 12% in environmental and climate protection,
2020 in developed countries) and public–private partnerships. These
as certain exceptional aid priorities feature in the European
plans come to an end, but stimulus plan, the Biden programme
fiscal efforts will continue,
easing the fears of the IMF
Public debt levels and also, to a lesser extent, the
Trump programme, which retains a
and central banks regarding a
sudden withdrawal of support.
are bearable commitment to new infrastructure
projects from his first term.
In the US, each candidate is because of Efforts to restore growth are vital
central-bank
proposing additional spending to counteract the fall in potential
(potentially a net USD 2 trillion growth that has taken place since
action.
with Biden and USD 1.0– the 2008 crisis. As we emerge from
1.5 trillion with Trump) and the current crisis, public spending
reforms if elected president. will spearhead a sustained recovery
In Europe, several countries because of its knock-on effects on
have announced that they will output, private-sector investment,
jobs and productivity. Government
stimulus is therefore shaping a new
MULTI P LIER EFFECTS OF P UB LI C IN V E ST ME N T post-Covid global economy, speeding
if inc re a s e d b y 1% of G D P up shifts that were taking place before
% deviation from
the pandemic hit.
12
trend
This new phase of fiscal stimulus
10.1
10 will keep budget deficits high for the
foreseeable future, with public debt
levels remaining well above 100% of
8 GDP in all developed countries. Such
debt burdens are bearable since
monetary policy will finance part of the
6
debt through purchases of government
bonds, as well as keeping interest
4 rates low, beneath the rate of growth.
2.7 As a result, debt servicing will not be a
problem if investor trust is maintained,
2
1.2 accepting low yields in return for the
hope of a stronger recovery in the
medium term, while waiting for a
0
Output Private investment Employment
vaccine to become available.
Source: IMF
8 | INVES T ME N T O U T L O O K 2 0 2 1
VOLATILE BUT RISING INFLATION
I
nflation has been very volatile in 1.3% in 2021. The United States is 0.25% on average this year to 0.6%
2020. It fell significantly in the expected to see an increase from 1.2% next, still well below the ECB’s target.
second quarter due to lower to 1.8% on average, with variations
commodity prices and the economic between an expected low of 1.1% and In emerging countries, aggregate
shutdown, before rebounding in all a high of more than 2.5%, providing inflation is likely to average 3% in
countries as lockdowns were eased retrospective justification for the Fed’s 2020 and 2.5% in 2021. It should
and oil prices stabilised. Transport, decision to focus on average inflation. stay moderate after some currencies
security and health-related costs rose If large-scale fiscal stimulus measures (e.g. the Turkish lira and some Latin
sharply because of the pandemic. are adopted, the upturn in US inflation American currencies) saw significant
There was also firm demand for certain could be sharper than expected. depreciation in 2020. In China, it is
consumer goods such as sport, leisure likely to average around 2% after
and vehicles. At the end of the year, In the United Kingdom, inflation is jumping sharply because of higher
VAT cuts in Germany and the United expected to average 0.9% in 2020 and pork prices.
Kingdom have added to the volatility 1.6% in 2021, but the likely increase in
in inflation indices by pushing prices transport prices and trade tariffs due In 2021, inflation will be volatile,
temporarily lower. Disinflation risk to Brexit could push it up more than showing an upward trend in developed
lingers because demand remains anticipated. countries as the year goes on. In
fragile, and central banks are still wary a d d i t i o n , t h e e ff e c t o f c u r re n c y
of this risk. In the eurozone, inflation has moved movements on imported inflation
into negative territory in late 2020 could amplify differences between
Our outlook for 2021 includes a because of lockdown measures, VAT geographical zones.
gradual rise in inflation in developed cuts and the strong euro. It is expected
countries in aggregate from 0.7% to to recover slowly in 2021, rising from
INVE ST ME N T O U T L O O K 2 0 2 1 | 92 CURRENCIES
THE US DOLLAR BEAR
MARKET CONTINUES
We believe that the US dollar bear market, which started in March this year, is set to
continue into 2021 and even to accelerate. In particular, we expect the currency to
drop against the euro, Swiss franc, Chinese yuan and Japanese yen. Gold will benefit
from continuing dollar weakness, although emerging-market currencies are unlikely
to see any major appreciation against the dollar.
I
n March, the US Federal Reserve further, such as explicit yield curve rapid deterioration in the US current
cut its Fed funds target range to c o n t ro l . T h i s s t r a t e g y, c u r re n t l y account. The deficit is close to 3% of
0.00–0.25%, from 1.50–1.75% pursued by the Bank of Japan, US GDP, and is likely to widen rapidly
at the beginning of the year. The would suppress bond yields within during 2021. Because the US budget
Fed also adopted a new quantitative tight ranges across the yield curve, deficit is set to remain large, close
easing programme, although there preventing them from rising as a result to the current 13% of GDP, further
are significant differences relative of increasing inflation expectations, economic recovery is likely to cause
t o p re v i o u s p ro g r a m m e s , s i n c e and so weaken the dollar even further. the current-account deficit to increase
the current one is open-ended and In the absence of a political agreement sharply. Since the dollar is fully valued
includes purchases of corporate on fiscal stimulus, the Fed may also according to most measures, it could
b o n d s . C r u c i a l l y, t h e F e d a l s o activate its private loan facilities, which easily weaken materially in the next 12
opened foreign exchange swap lines may turn into a guarantee programme months. In the past, similar scenarios
with both advanced-economy and for consumers and small businesses, have seen it fall by between 20% and
emerging-market central banks to like the one in the UK: this could 30% on a trade-weighted basis over
improve liquidity conditions outside further expand its balance sheet, also subsequent years.
the United States. Over the following causing the dollar to depreciate.
months, the dollar lost ground against Indeed, when US growth is moderate
most G10 currencies – with those One of the main reasons for dollar and global growth is resurgent – the
showing higher interest-rate profiles weakness in the year ahead will be a scenario that is most applicable to
outperforming – while its performance
against emerging-market currencies
was more mixed.
T H E U SD W E AK E N S F O L L O W I N G U S RE C E SSI O N S
Coming into 2021, we anticipate that
the dollar may continue to suffer from 130 US recession 1
Fed policies announced in late 2020.
Not only does the Fed intend to keep 120
rates on hold until at least 2023, it
has now adopted average inflation
targeting. Even before the pandemic, 110
the US was one of the few economies DXY Index (LHS)
producing inflation. If it continues to 100
do so after the pandemic, but without
a policy response from the Fed, the
resulting periods of inflation overshoot 90
will reduce the US dollar’s purchasing
power and it is likely to weaken
80
gradually.
The Fed also has additional tools it 70 0
can deploy to ease financial conditions 2000 2005 2010 2015 2020
Sources: UBP, Bloomberg Finance L.P., NY Fed
10 | INVES T ME N T O U T L O O K 2 0 2 1A worsening US
current account
deficit and political
forces will weigh
on the dollar.
U SD / J PY FAI R VAL U E I S BE L O W 1 0 0
2021 – the dollar has historically 135 6
been weak. The risk of the dollar
appreciating could emerge in two USD–JPY real yield diff. (RHS)
scenarios. The first is when the 125
4
US enjoys a large growth premium
over the rest of the world. With the
Chinese economy already transitioning 115
from recovery to expansion and co- 2
ordinated fiscal stimulus set to emerge
105
in Europe in early 2021, this scenario
appears unlikely. 0
95
The second scenario for dollar
appreciation is when risk aversion rises
-2
to extreme levels, as in the 2008–09 85
global financial crisis and the initial USD/JPY (LHS)
stages of the Covid-19 pandemic
(January–March 2020). Given the 75 -4
2004 2008 2012 2016 2020
proactive nature of global fiscal and
monetary policymakers, this risk is Sources: UBP, Bloomberg Finance L.P.
likely to be modest and transient.
There are also substantial political
f a c t o r s w e i g h i n g o n t h e d o l l a r. to global growth. The likes of the Unlike in the period following the
Politicians and monetary authorities Australian, New Zealand and Canadian global financial crisis, we do not
will use all of their clout to keep the dollars, as well as the Swedish krona expect significant dollar weakness
dollar down, since stronger USD and the euro, will fare well in this against emerging-market currencies,
exchange rates tend to be deflationary scenario. which are demonstrating limited carry
and there is a close correlation this time around in both nominal and
between an excessively strong US However, if global growth proves relative terms. Indeed, many of them,
dollar and emerging-market debt weaker than anticipated, safe-haven including the Brazilian real, the Turkish
defaults. A stronger dollar would also currencies should outperform. Even if it lira and the South African rand, are
further widen the US trade deficit, does not, the Swiss franc and Japanese showing substantially negative real
which is already considerable even yen will strengthen against the US interest rates. Because the Fed will
after oil imports are stripped out. In a dollar due to dollar weakness, but keep rates low for at least the next
demand-deficient world, no-one wins any deterioration in risk sentiment will two years, emerging countries’ central
from stronger USD exchange rates. accelerate the dollar’s decline against banks will be reluctant to raise rates
these currencies. We see USD/CHF given weak global demand. In our view,
Global manufacturing PMI figures bode dropping to near 0.81 by the end of therefore, their currencies will struggle
well for currencies highly exposed 2021, and USD/JPY to close to 101.00. to appreciate against the dollar in 2021.
INVE ST ME N T O U T L O O K 2 0 2 1 | 113 FIXED INCOME
WHERE TO NOW FOR
FIXED INCOME INVESTORS?
With the approaching end of the bond bull market that began in the early 1980s as the
battle with the ‘Great Inflation’ of the 1970s was won, investors should be cautious:
the transition into an outright bond bear market will likely be fraught with volatility
as the global economy is pulled between post-lockdown deflationary pressures and
fiscal and monetary reflationary efforts.
T
he high gover nment and Near 1.5% should be an adequate
private debt levels that inflation assumption even if an
have culminated in the extended tug of war between
unprecedented fiscal spending of
2020 will serve to contain the rise
An approach deflationary forces and inflationary
policies lies ahead.
in risk-free 10-year yields even
if growth returns as expected in focused on quality With negative inflation-adjusted
2021. Negative inflation-adjusted
yield curves, we expect, will be credit should yields expected and a rebound
in inflation well priced into low-
secure modest
a policy objective to assist in the risk gover nment bonds, fixed
deleveraging process just as the income investors will need to look
returns in 2021.
Federal Reserve did in the 1940s further afield for returns. Already
as the US entered World War II. in recovery and the early stage of
expansion, the Chinese economy
This should leave US 10-year has seen domestic government
Treasury yields capped near 1%, yields rising from the March 2020
at least until inflation accelerates all-time lows. At 3–3.5%, Chinese
beyond the Fed’s 2% target. At away from past disinflationary gover nment bond yields offer
the same time, should a renewed decades, we suggest caution. Post- near historic pick-ups versus US and
demand shock materialise, we suspect lockdown demand scares should German yields in a currency that, in
American policy-makers will apply the offer opportunities to build positions particular against the US dollar, should
lessons learned from Japan: they will when inflation becomes underpriced. strengthen in the year ahead.
seek to maintain a positively sloping
yield curve and keep the benchmark
US bond yield anchored above 0.5% L O O K T O E U RO PE AN H YBRI D SE C U RI T I E S
in support of the US banking system I N ST E AD O F U S H I G H -YI E L D C RE D I T
and financial markets. 100
Benchmark German yields should
follow a similar pattern though 50
anchored below the zero bound that
has been in place since early 2019.
US high yield ex energy OAS (bps)
With the benefits of negative rates 0
Global CoCo OAS less
apparently largely exhausted and with
the US central bank adamant that it -50
will not pursue a negative nominal
interest rate policy, German yields
even lower than the -0.8% low seen -100
in March 2020 should underlie euro
area yields in 2021.
-150
Though inflation-linked bonds might
be attractive as the world transitions
-200
2014 2015 2016 2017 2018 2019 2020
Sources: Barclays, Bloomberg Finance L.P. and UBP
12 | INVES T ME N T O U T L O O K 2 0 2 1Credit investors, though, should be spreads relative to US credit. USD-
increasingly selective in 2021 as the referenced investors can similarly look
default cycle that typically follows to European banks’ hybrid securities
a global recession has not played which offer premium yields to high-
out fully, having been extended yielding securities despite an implied
by gover nment intervention. This backstop from the European Central
should favour active credit selection Bank. Once again, active credit
rather than the passive investment selection will be critical in both of these
approaches that have worked well over arenas in the year ahead.
the past decade. A focus on quality
while looking through what will likely On balance, an approach focused on
be near-term volatility to hold quality quality credit should allow investors
credits to maturity should be valuable to look beyond a further pick-up in
during this transition phase. corporate defaults and the attendant
near-term volatility to secure modest
Like in government bonds, investors returns in 2021. Alternatively, long/
can find respite by looking outside the short credit or equity market-neutral
US and Europe, we expect. Despite strategies may offer approaches to
being further along in the recovery generating return that are less correlated
cycle, Asian investment-grade credit to the vagaries of a fixed-income market
still offers investors cyclically wide in the midst of a long-cycle transition.
A BULL IN CHINA’S
BOND MARKET
C
hina government bonds offer interest rate-driven policies in contrast
fixed-income and multi-asset to the quantitative easing strategies
investors an ability to invest as now at the forefront of policy in the
they had prior to the zero interest-rate US, the euro area, Japan and the UK.
regimes proliferating around the world. For investors, this means that, should Moreover, should the more durable
They provide both high nominal and another negative shock occur and Chinese economic expansion we
positive inflation-adjusted yields in an threaten China’s economic growth, expect materialise, this historically
economy that is still running relatively government bond investors can still wide gap between China and US 10-
traditional monetary policy. benefit from the prospect of falling yields year yields should allow investors
to drive potential capital gains. in local currency to benefit from an
At more than 3%, 10-year local- appreciating currency to augment their
currency gover nment yields have Admittedly, with the Chinese economy local currency income. This, combined
rebounded following their lockdown- transitioning from the recovery phase with ongoing opening up of local bond
induced declines to levels last seen of recent quarters into broader- markets to foreign investors, should
in early January 2020, nearly 130 bps based expansion, investors do face support the Chinese currency.
above China’s recent consumer price the prospect of a further rise in
inflation trends as well as its 5-year China’s benchmark yields. However, Thus, just as the global and eurozone
average. This is in marked contrast much as US yields were anchored by financial crises pushed conservative
to the near- or below-zero nominal European investors fleeing negative investors further down the credit
and inflation-adjusted yields offered yields following the eurozone financial spectrum to generate positive returns,
by major economies’ sovereign bonds crisis, we suspect the historically fixed-income and multi-asset investors
in North America and Europe. wide spreads between China and should now look further afield to China
US/European government yields may government bonds to serve the same
China’s central bank, the People’s Bank serve to prevent Chinese yields from purpose, in the shadow of the 2020
of China, continues to run traditional, rising too quickly. coronavirus crisis.
INVE ST ME N T O U T L O O K 2 0 2 1 | 134 EQUITIES
INVESTING IN
TRANSFORMATION
The months since the start of the global pandemic have spurred changes to the global
economy that, even with a vaccine and a return to ‘normal’, will likely not reverse.
Themes like fintech, green tech, and China’s economic transition, in addition to biotech
and online services, will be key for investors in 2021.
T
G RE E N E N E RG Y F O L L O W I N G RE TAI L’ S PAT T E RN
he extent to which transformative BU T W I T H V O L AT I L I T Y
growth themes have outpaced
m o re t r a d i t i o n a l e c o n o m i c 2500
segments in the 2020 equity market
rally has understandably left investors
cautious about its sustainability. 2000
However, they should not overlook
the cyclical and structural collapse Amazon.com rel. to Wal-Mart stores (indexed)
in earnings (chart) that has resulted 1500
from pronounced sales declines
among sectors being left behind in the
transformation of the global economy. 1000
Much like the internet and mobile
computing served as transformative 500 NASDAQ Green Energy Index
growth themes amidst the volatility of rel. to MSCI World Energy Index
the technology bubble at the turn of (lagged 5 years)
the century, we expect a number of 0
long-cycle themes will be integral parts 2005 2010 2015 2020
in this cycle’s global, post-pandemic
Sources: NASDAQ, MSCI, Bloomberg Finance L.P. and UBP
economic reshaping.
In retrospect, the collapse of the other aspects of day-to-day life are still In the West, the penetration of fintech
technology bubble in 2001 provided at a comparatively early stage of their at the expense of traditional banking
only a temporary, though painful, online transition, much like shopping and relationships remains in its infancy and
detour from the secular trends at entertainment were in the early 2000s. provides investors with a pivot from
the time, including the transition more mature transformation stories.
from desktop to mobile computing Similarly, while opportunities remain
and from offline to online activity. in biotech, the pandemic has also
We expect a number of trends in accelerated the need for alternative
the current era will likewise have service delivery options in the
Investors should
staying power. medical arena, including telehealth
and remote, robotic surgery.
Though consumer-oriented tech-
nology and the biotech sectors
have been at the forefront of
broaden their T h e g re e n t r a n s f o r m a t i o n o f
the global economy also offers
investors’ minds amidst the work-
from-home pandemic economy of
scope to key opportunities spurred on not only
by the broader environmental
2020, investors should broaden
their scope to other key themes themes reshaping movement, but now increasingly by
government funding and regulation
that will be integral to reshaping the
world in the decade ahead. While the world. to accelerate this process (see
page 22).
online shopping and entertainment
will likely continue gaining share China is once again in transformation
from offline consumer activities, mode, shifting its focus from
14 | INVES T ME N T O U T L O O K 2 0 2 1CAN SOARING EQUITIES
exports to improving the quality,
sustainability, and independence RISE EVEN HIGHER?
of its domestic growth profile. The
W
transformation of China’s domestic
capital markets will likely be an ith equity valuations globally, Looking ahead to 2021, this
important story for the coming decade, and particularly in the US, at distinction is important, since
creating investment opportunities in its levels last seen in the midst investors are potentially facing a
burgeoning domestic equity and bond of the 1999–2000 technology bubble, different landscape from the one
markets (see page 16). the rise in valuations behind much of they saw back then. While valuations
the rally from the 2020 market lows are at similar levels, the earnings
Undoubtedly, as the global economy no longer appears to be a likely driver cycle, instead of peaking, appears
recovers, boosted by the prospect of returns in the years ahead. to have bottomed out in the second
of rising fiscal policy dominance quarter of this year; in the second
(see page 6), periodic bouts of That said, it is worth recalling that the half, earnings have begun to recover
outperformance may be provided historic crash following the technology steadily from the damage caused by
by a cyclical turn in sales growth bubble at the turn of the century, the global pandemic, in particular the
momentum combined with the greater during which global equities fell by lockdowns that took place early this
leverage to global recovery that some half, came after nearly two and a half year and that have resumed in some
of these traditional sectors offer. years in which valuations remained parts of the world in late 2020.
above 22x forward earnings, where
Here, though, investors should focus markets sit today. With earnings still contracting year-
on quality cyclical companies that on-year in this second half, investors
have substantially completed their Indeed, the collapse in valuations are likely still in the early stages of
transformations and restructurings. from an ultimate peak of 27x earnings this rebound in earnings. Of course,
Strong balance sheets are a good to a trough of 14x earnings did not an economic upturn will be important
starting point. However, sectors begin until October 2000, shortly for the next phase of the earnings
which, pre-pandemic, were already after the US Federal Reserve’s final recovery. However, as highlighted
in prolonged downturns that forced rate hike. However, a more important in our discussion on the economic
deleveraging, consolidation and factor behind the subsequent decline outlook for 2021, expected fiscal
underinvestment may offer attractive was the turn in earnings momentum activism should help provide the
cyclical opportunities as these – where growing earnings became catalyst for that next phase in the
reversals occur. Select industrial falling ear nings – that began in coming year.
s e g m e n t s s h a re s o m e o f t h e s e earnest in 2001.
characteristics, as does mining around Undoubtedly, the upcoming earnings
the world (see page 19). As a result, while the 2001–02 recovery will be patchy, as some
experience highlights the fact that sectors may see permanent damage in
With equity valuations high as we enter high valuations can limit returns, the decade ahead from the new world
2021, like in 2000, risk management events in 1999–2000 show that that is taking shape. However, this
will be key. A quality-biased, risk- valuations can remain high for an probably means that active, thematic
m a n a g e d a p p ro a c h f o c u s e d o n extended period, leaving earnings and stock selection-focused investors
sustainable earnings momentum in the growth as the key driver for total will continue to hold the key to returns,
context of traditional long-only or even returns even in the context of a wider instead of the passive, index-oriented
long/short strategies in particularly bubble in equity market valuations. approach seen in the last decade.
volatile sectors should provide a good
foundation.
INVE ST ME N T O U T L O O K 2 0 2 1 | 155 CHINA
THE RISE OF CHINA
2021 represents not only the transition from recovery to expansion in the post-
lockdown Chinese economy, but more importantly for investors, the final runway as
China approaches the symbolic 100th anniversary of the establishment of the People’s
Republic of China in 1949.
S
ince introducing economic
reforms that began in 1978 to
open its economy up to the
world, with its ultimate ascension to
the World Trade Organization in 2001,
China has been seen as an export
engine to the world.
Looking to the last couple of decades of
the People’s Republic of China’s (PRC)
first century, investors should expect
this outward focus on growth to turn
increasingly inwards, towards quality
and sustainable domestic growth, with
a number of important implications.
The first is a shift in foreign exchange
policy. After its devaluation shock in
2015 and its trade war with the US in China is
2018–19, assuming US–China tensions
remain contained, the prospect has increasingly
turning inwards,
emerged of a strengthening yuan as
a tool for China to manage potential
towards quality
domestic inflationary pressures (chart). With China set to unveil its 14th
five-year plan, investors should
The second implication is a further continue the tried and tested
opening up of the previously restricted
domestic capital markets to foreign
approach of aligning themselves
with the objectives of the ruling
and sustainable
investors. The still substantially positive
nominal interest rates, in a currency
party as it seeks to strengthen the
foundation of its economy.
domestic growth.
that is expected to strengthen, offers
sovereign bond investors a haven from Technology is one key theme, as
the low returns across the global fixed China’s recent announcement of
income segment. its ambitious target of carbon neutrality five-year plan. The accelerating take-
by 2060, along with its efforts in 5G as up of online education, healthcare
Thirdly, the domestic focus will likely well as artificial intelligence, highlight and other services due to lockdowns
also come with the need to contend its pursuit of leadership in key 21st- should deepen the penetration of the
with past credit excesses. Defaults, century technologies. This includes the virtual economy in China.
though non-systemic in nature, should digital payments segment where China
become more commonplace as the looks set to be the first major nation to These ambitious aspirations are not
clean-up of the financial system once launch a central bank digital currency. completely without risks, admittedly.
again picks up pace. Combining select C y c l i c a l l y, e q u i t y v a l u a t i o n s a re
credits with Chinese gover nment Stemming rising income inequality elevated though earnings expectations
bonds will offer investors a balanced and a focus on the quality of domestic a re l i k e l y t o f a i l t o c a p t u re t h e
risk–return profile in a shifting Chinese economic growth should take economic recovery that lies ahead.
fixed income arena. increasing focus as well in the coming In fixed income, recovery suggests
16 | INVES T ME N T O U T L O O K 2 0 2 1F U RT H E R YU AN ST RE N G T H W O U L D SU PPO RT
D O ME ST I C RE F O RM PO L I C I E S
300 5.6
250 5.8
China 10-yr yield less US 10-yr yield (bps; fwd 6 mos)
200 6.0
cyclically rising yields but we expect
the anchor of low rates in the US and 150 6.2
Europe to slow this rise. As a result, we
believe thematic and stock-selection 100 6.4
approaches are preferable to passive,
index-oriented strategies within China. 50 6.6
Beyond these cyclical challenges, 0 6.8
modest efforts to reform and
-50 USD/CNY (RHS, inverted) 7.0
restructure China’s domestic financial
system have been derailed by -100 7.2
economic shocks in the past, leaving US–China
policy-makers once again to resort to -150 trade war 7.4
traditional debt-focused infrastructure 2008 2010 2012 2014 2016 2018 2020 2022
spending to stabilise the economy.
Sources: Bloomberg Finance L.P. and UBP
Moreover, with continuing tensions with
Taiwan and recent forays on its border
with India and in the South and East shift in the geopolitical status quo in a portion of Chinese exposure via high-
China Sea, it appears clear that the these theatres could be even more quality long/short equity hedge fund
PRC is seeking to clarify its territorial destabilising for the global economy. strategies allowing investors to remain
claims. Thus, while the recent US– engaged in long-term transformation
China trade war upended the WTO-led Given these geopolitical struggles themes while maintaining active risk
world trade order, a more pronounced and the risk of escalation, we prefer management (see page 23).
BACK TO FAMILIAR SHORES?
T
he pandemic and the shutdown According to a recent study 1, China’s Moving production back to developed
of the global economy have hit share of US manufacturing imports fell countries is also no simple task:
trade and revealed weaknesses in 2018 and 2019, and the decline has studies show that this tends to
in production chains: industrialised continued in 2020 due to the general involve heavy use of robot process
countries have been shown to be slowdown in trade, with companies automation, which requires highly
highly dependent on products made moving some of their Chinese qualified staff. The need to access the
in emerging countries, including production to other Asian countries right technology and highly specialised
medicines, medical equipment, and Mexico. High-profile companies labour, and to rebuild a network of
automotive components, food, rare like Google, Omnidex, Microsoft, subcontractors, may slow down the
earths and technological hardware. Apple and GoPro have left China. reshoring process.
However, they have remained close
This has prompted certain Western to both China and the US – two key While waiting for greater clarity about
gover nments to resume policies markets – by choosing countries that US trade policy, large corporations
seeking to entice production back have signed trade deals with them. are likely to continue diversifying
onto their own shores with the aid of production, securing their supply
subsidies. Is this combination of events In fact, production had already started chains and seeking opportunities
resulting in significant reshoring? to shift away from China before trade in various countries. As a result,
tensions increased, because of rising the reindustrialisation of developed
In 2018, the escalation of the trade Chinese wages: Vietnamese wages are countries may prove partial, with only
war between China and the US started half as high, while Mexican ones are a limited withdrawal of international
to slow the growth in trade. Facing 30% lower. In addition, leaving China companies from China.
the return of certain constraints and is not easy for companies that want 1
“Trade war spurs sharp reversal in 2019
tariff barriers, international companies exposure to the market growth driven
Reshoring Index, foreshadowing COVID-19
started to relocate their production. by the rise of the Chinese middle class. test of supply chain resilience”, Kearney 2020
Reshoring index
INVE ST ME N T O U T L O O K 2 0 2 1 | 176 COMMODITIES
PRECIOUS METALS:
VARYING TINTS
Prevailing trends look set to continue in 2021, with gold benefiting from the usual
factors like geopolitical tensions and silver boosted by the recovery in industrial
manufacturing, while platinum falls out of favour as demand shifts and technologies
evolve, particularly in the auto sector.
Gold – Continuing upside
Investors are
because of its safe-haven status.
I
Even if economies reopen following
n 2021, gold will continue to the introduction of a Covid-19
benefit from many of the same
factors which drove it to new
maintaining vaccine, we expect gold to benefit
from the revival in consumer
all-time highs in 2020, reaching
USD 2,200 or more by year-end. sizeable long demand, particularly in Asia.
This is consistent with future gold positions The risk to our gold price forecast
is on the upside. Investors are
but will continue
growth in US M2 money supply, maintaining sizeable long gold
and monetary policy should remain positions, but as in 2020, they will
to prioritise
supportive: central banks around continue to prioritise physical gold
the world are now effectively over financial gold, meaning that
running policies involving negative we can expect strong underlying
real interest rates, and intend
to keep them that way over the
physical gold. demand.
coming years. In addition, the Silver – Higher beta to global
prospect of further quantitative Geopolitical tensions, particularly growth
easing, negative deposit rates and between the US and China, are now
negative-rate tenders is increasing a feature of the new global landscape For silver, we see little chance of a
the upside for gold. and are working in gold’s favour material price decline in 2021, instead
expecting a rise towards USD 32 per
ounce by the end of the year, with risks
NEGATIVE R EA L Y I ELDS W ILL DR I VE G O L D H I G H E R firmly to the upside. Silver should be
underpinned by a gradual recovery in
2200 -2.5 the global economy, the proliferation
o f g re e n p o l i c i e s a c ro s s m a j o r
economies, and the same monetary
2000 -1.5
US real yield (RHS, inverted) factors as those supporting gold.
1800 -0.5 Improving industrial demand since
M a y, c o m b i n e d w i t h t h e f i s c a l
stimulus we anticipate in early 2021,
1600 0.5 point to a steady recovery in global
manufacturing. This is positive for
silver, which is used in a large number
1400 1.5 of industrial processes.
Gold (LHS)
We expect stimulus measures to have
1200 2.5
a substantial green bias (see page 22),
providing a medium-term tailwind for
1000 3.5 silver, which is a key component in
2010 2013 2016 2019 solar panels. Moreover, with the gold–
silver price ratio still above its 30-year
Sources: UBP, Bloomberg Finance L.P.
18 | INVES T ME N T O U T L O O K 2 0 2 1average, silver remains undervalued more than 120,000 ounces above its from diesel is likely to remain a drag
relative to gold. previous estimate. While supply is on the platinum price, since around
down modestly in 2020 due to Covid- 40% of demand has come from diesel
Platinum – Underperformance related shutdowns, demand has fallen vehicles in recent years. Over the long
despite industrial recovery more. term, the promise of hydrogen fuel-cell
technology is positive, but for the short
In 2020, platinum was one of the In terms of demand from the auto term, this is unlikely to fill the gap left
worst-performing precious/industrial sector, the secular transition away by weak auto demand.
metals, failing to match the rally
seen by the likes of gold, silver
a n d p a l l a d i u m . P l a t i n u m ’s p o o r
performance is explained by a large
decline in jewellery demand, the auto
sector slowdown and significant
excess supply. Together with a shift
away from diesel vehicles, these same
factors mean that platinum is unlikely
to see any material rally in 2021.
T h e Wo r l d P l a t i n u m I n v e s t m e n t
Council now anticipates a 2020
surplus of around 247,000 ounces,
SITTING ON A GOLD MINE?
T
h e c o r re c t i o n i n p re c i o u s in late July and August should see destroyed value for shareholders, an
metals prices since the third volumes return to match the cyclically active, quality-biased stock selection
quarter of 2020 has provided high margins in the sector and drive approach is prudent in the gold
investors with an opportunity not the next leg of earnings growth in mining sector.
only to continue building positions 2021.
in physical metals, but also to refocus Royalty companies can offer a
on the gold mining sector, which Indeed, despite the near all-time high comparatively lower risk entry
should see multiple drivers beyond in physical gold prices, sales per point into the sector. They provide
rising metals prices in 2021. share among leading gold miners still producers with upfront financing
sit near levels last seen in 2008–09 in exchange for a share of gold
Unlike in typical gold bull markets, when physical gold prices were below production or revenue generated
low energy prices and falling local USD 1,000 per ounce, compared with from specific projects, leaving them
currency production costs mean that the USD 1,800–1,900 currently. less exposed to operational risks than
gold miners will see their costs fall direct producers.
by as much as 13% to close to USD Even without this rebound in
900 per ounce, or more than 50% sales, high margins have allowed On the whole, large, well-run,
below current spot gold prices. This leading producers to initiate or diversified producers offer investors
expansion in profitability has been raise existing dividends as free greater leverage to rising gold prices
key to the gold bull market from the cash flow grows within the sector, with their diversification and long-
March 2020 lows. potentially enhancing total returns term track record providing protection
to shareholders. against poor capital allocation
Beyond this, with mine capacity decisions seen among newer entrants
having shut down for much of the For conservative investors in a sector into the sector.
second quarter of 2020, reopenings that has historically, in aggregate,
INVE ST ME N T O U T L O O K 2 0 2 1 | 197 US ELECTIONS
A BRAVE NEW
UNITED STATES
The unexpectedly close race for United States president presages an accelerating
shift in the geopolitical landscape that poses greater risks for investors. Active risk
management is increasingly important while a pivot towards transformational local
rather than global trends is key to preserving and building wealth in this new regime.
T Americans voting
he world has sighed with relief foundations have at a minimum been
now that, after several days of challenged and, at least in the eyes of
vote-counting, it appears that America’s key allies, may have been for Trump
Democrat Joe Biden will take over in irreparably broken.
the White House and, above all, that
the Trump administration will come Indeed, the four years of Donald
2016 2020
to an end on 20 January 2021. Yet Trump’s presidency have already
the tightness of the race and the challenged bilateral relationships in 63 mn 72.4 mn
lingering uncertainty as to which party Europe and Asia in particular. Even
will control the Senate speak to how a return to a more moderate 46th
Source: Associated Press
heavily the change in the US will affect president in the form of Joe Biden
the world and investors. may not be sufficient to dampen the
distrust and restore belief in the US
Remember that the election of the
45th President of the United States
as a ‘reliable partner’ 1.
Polling error
in 2016 came amidst a populist wave Undoubtedly, a Biden administration underestimating
that included the UK’s vote to leave the will seek to reverse many measures
European Union, the rise of the Five taken by its predecessor domestically Trump vote
Star Movement in Italy, and victories and internationally, including perhaps
by populist candidates to high office returning to the Paris Climate Accords,
in Austria and the Philippines. Thus, the Iran Nuclear Deal, and the World 2016 2020
investors cannot be faulted for thinking Health Organization. However, the 1.1% 5.0%
that the US had simply been caught narrowness of the rebuke of America’s
up temporarily in a global populist 45th president will likely leave concern
movement that began to fade with among international allies that the US’ Sources: Associated Press and UBP
the closely watched defeat of one of dalliance with populism was something
its proponents, right-wing Marine Le other than fleeting.
Pen, in France in 2017 and with only
modest gains in the elections for the Indeed, across the key US–China and Who will be more
European Parliament in 2019. US–Europe axes, this doubt built up
over the past four years has already powerful coming out
However, the 2020 US presidential
election largely dispels this notion.
prompted countries to take steps
to protect themselves. China, the
of the crisis?
Instead, the very fact that the race most populous nation in the world,
went down to the wire, that polling appears to have already chosen a path
errors arguably occurred more than in towards self-sufficiency judging by the
the contentious 2016 election which early drafts of its upcoming five-year
brought President Trump to power, plan. With Biden likely to eschew the China US Europe
and that more Americans voted for belligerent policies of outright bans on 37% 6% 5%
Donald Trump in 2020 than in 2016 technology sales or even on access
suggests that America’s centrist to US capital markets that President Source: Lowy Institute
20 | INVES T ME N T O U T L O O K 2 0 2 1Tr u m p a p p e a re d t o b e m o v i n g will likely have to evolve as well, US ‘put option’ that has served to
towards, China will have a chance to with markets increasingly driven by protect investors from such policy
patch up the vulnerabilities exposed domestic rather than US-centric fiscal errors in decades past. Moreover,
by the damaging US–China trade war policies and political priorities. This, while the globalisation of the world
of 2018–19. combined with the zero interest-rate economy has moved investors away
regimes prevalent across Western from their natural home bias, this new
For Europe, it has come in the form economies, means the prospect and world will require them to become
of a dialogue to drive the next rounds consequences of local policy errors increasingly local again. This is how
of reform in the long-running “Ever are substantially higher than they have they can capitalise on the trends which
Closer Union” experiment, much like been in previous cycles. began to reshape global economic
the global pandemic has set the stage and geopolitical relationships under
for the early steps towards shared Indeed, the narrow victory by not only President Trump and are likely to
f i s c a l p o l i c y. H o w e v e r, E u ro p e ’s the incoming President but also in accelerate under President-elect
comparatively protracted decision- the US Senate raises the risk that the Biden.
making process and reliance on global US will follow in the footsteps of its 1
Angela Merkel stated after a G7 summit in May
trade may make it more difficult for European counterparts and go back
2017, “Recent days have shown me that the
it to follow the same path as China to an era of fiscal paralysis like the times when we could rely completely on others
at a comparable pace. Instead, post-Global Financial Crisis period. are over to a certain extent.”
Europe will likely gradually transition However, this time, with more limited
its relationship with the US, forged Federal Reserve capabilities, more
on the battlefields of World War II, e x t re m e m o n e t a r y p o l i c y
to one that is more balanced and choices may need to be
independent from the US as it begins made alongside fiscal action,
The fact that
to build up its own continent-wide though only in response to a
policy agendas. Undoubtedly, China new crisis facing the global
the race went
will seek to influence this pivot with economy, like that in March
both incentives and deterrents aligned 2020.
to its own interests.
Though monetary policy strategies
Thus, an increasingly active
risk management regime is
down to the wire
in the developed world have been
converging, the traditional lens
needed in this new, multi-
polar world (see page 23) in suggests that
through which we look at the world the absence of the implicit
America’s centrist
foundations have
been challenged.
INVE ST ME N T O U T L O O K 2 0 2 1 | 218 RESPONSIBLE INVESTMENT
EQUIPPED FOR
THE WEATHER
2021 should see climate change move centre-stage as China – the world’s largest
carbon emitter – and Europe look to implement meaningful policies to address this
growing challenge for the global economy, while progress could also happen in the
US, which ranks second behind China in terms of carbon emissions.
T
he European Commission’s retail transitions, which show that chain are already changing the farming
proposals aim to reduce EU- such interludes should be viewed as landscape. Climate-related themes,
wide net greenhouse gas opportunities to build positions further. such as biodiversity, scarce materials,
emissions by at least 55% by 2030. healthy ecosystems, sustainable
China is seeking to become carbon- Experience tells us that companies and communities and basic needs should
neutral by 2060 with ambitious targets industries that are slow to adapt will at also present long-cycle opportunities
likely to feature in its five-year plan, set best be challenged and may end up for investors.
to be finalised in March 2021. being sidelined, while those that adjust
rapidly will present opportunities for Generating investment returns and
While the US has yet to match either investors. This now applies to carbon- adding social value do not have to
Europe’s or China’s ambition, progress intensive industries such as power be mutually exclusive. Investing in
may still come following Joe Biden’s generation, heavy manufacturing and companies that facilitate the transition
election victory and in the event of transportation: stock-picking will be to a resilient, net-zero emissions
Democrats taking control of the US key in these legacy segments. society by 2050 could make everyone
Senate in the January run-off elections a winner.
in Georgia. The obvious beneficiaries are wind,
solar, hydro and other alternative
The world appears on the cusp of a energies, along with transportation
long-cycle transition from fossil-fuel options like electric vehicles. However,
dependency towards a future that many other opportunities are also
relies on renewables. The European emerging. New agricultural practices
Union’s sustainable finance taxonomy and increasing demand for a reduced
and the upcoming frameworks created carbon footprint across the food value
by China’s five-year plan are providing
the catalyst for the current wave of
transformation.
Just as computing has transitioned
from desktop to mobile and retail from
The world is
in-person to online shopping in the
21st century, investors should expect
on the cusp
a multi-decade shift from fossil fuels
to renewables. However, as with those
of a transition
transitions in computing and retail,
this climate-change transition is set from fossil-fuel
dependency
to come in waves.
towards
The rally in green energy stocks in 2020
suggests that markets have priced in
renewables.
a faster transition. While moves by
Europe, China and potentially the US
do indeed suggest an accelerating
timetable, investors should anticipate
occasional pauses in long-term
outperformance. This has been seen
in the aforementioned computing and
22 | INVES T ME N T O U T L O O K 2 0 2 19 ALTERNATIVE RISK MANAGEMENT
STAYING ACTIVE IN
RISK MANAGEMENT
As in 2020, active risk management will be crucial for investors in 2021, especially as
US and European government bonds no longer offer the protection they did in previous
cycles. The experience of euro-based investors after risk-free German Bund yields fell
below 1% – just as US Treasury yields have done in 2020 – is instructive.
W
hen German Bund yields were
above 1%, they helped offset
as much as 25–30% of equity
market declines of 10% or more. When
they fell below 1% and even before
they turned negative, they could no
longer be relied upon to offset equity
market volatility in any meaningful way.
The same is true of US Treasuries now
that they yield less than 1%, as shown
during the September correction in
global equity markets.
Investors should therefore increase
exposure to alter native assets
such as hedge funds, structured
products, options and futures to By mitigating risks
add some asymmetry to traditional
equity and fixed income, long-only- we can exploit
transformational
biased investment portfolios .
themes as they
We use hedge funds to reshape
the risk–return profiles of these
traditional asset classes where
they may otherwise be skewed
against investors. For instance,
emerge in this new portfolios against downside risks
while retaining upside exposure in
some corporate bond issuers
have proven vulnerable in the
global economy. a risk-managed way.
current pandemic. This has created Looking ahead to 2021, investors
substantial opportunities for long/ still face risks. The financial
short credit hedge funds able to markets remain uncertain, with
capitalise on the resulting dispersion. market movements. The use of these extreme measures being taken on the
products has been highly beneficial, monetary and fiscal front, and several
Similarly, within equities, long/short especially in 2020 as they have political and pandemic-related tail risks
emerging equity managers can provide substantially cushioned sharp market looming. Our active risk management
exposure to the long-cycle Asian declines. approach allows us to contain some of
consumer theme, while shielding these risks, especially in the context of
investors from the volatility typically We have used futures and options the capital-preservation preference of
associated with this asset class. strategies periodically in 2020, many of our clients. More importantly,
and they have been critical during by mitigating these risks we can
Structured products allow us to challenging periods. In particular, put increase our ability to capitalise on
express views on underlying assets option strategies have been vital in the opportunities that markets present
while reducing downside risks on shielding portfolios during the testing during periods of volatility, and exploit
those assets, delivering an asymmetric conditions seen so far in 2020. They longer-term transformational themes
performance outcome to portfolios, have been an effective and efficient as they emerge in this new global
particularly in the event of adverse way for us to hedge underlying economy.
INVE ST ME N T O U T L O O K 2 0 2 1 | 23You can also read
