Welcome to our 2021 Winter edition of Investment Perspectives

Traditionally, in our Winter edition of Investment Perspectives, we reflect on the highs and lows of the previous year and provide some expectations for the year ahead. 2020 is a year that will become synonymous with the global pandemic and therefore it’s difficult to fully reflect and move on while we continue to be impacted by it.

This has not been the case for markets, which looked past the current disruption and touched new heights at the turn of the year. The vaccine has been an elixir for asset prices long before it began to be administered to the general population. However, if we were to focus exclusively on these market levels (without any knowledge of what has happened to global economic growth), we might believe that the global pandemic had actually had a positive impact on the global economy in 2020. However, we would argue this only highlights the growing disconnect between the two and nowhere is the comparison starker than in equity markets.

Perhaps we can take some comfort then that historically equity markets are considered a leading indicator and therefore we can be cautiously optimistic that economic activity (and everyday life) will recover in 2021. Chris Arcari explores this in more detail in his capital markets outlook covering global economic activity, and we also explore some broader investment themes in the following articles:

• Andy Green discusses the possibility of UK interest rates falling below zero and some of the practical considerations and implications for assets and liabilities of negative interest rates;
• Asad Rashid digs into the changing composition of emerging market equities and discusses the five things every emerging market equity investor needs to know; and
• Sticking with emerging markets, Penny Cochrane explores emerging market debt and provides her views on the case for a strategic allocation.

 Download our full publication here