Invesco

Ian Hargreaves, co-Head of the Asia & Emerging Markets Equity team, outlines his views on the opportunities he sees within the Asian equity markets over 2021. Asian equity markets have enjoyed a v-shaped recovery since their March lows, but recent market strength suggest markets are up the events. Looking forward, Ian believes this offers a notable amount of scope to drive outperformance by capitalising on valuation differences within different areas of the market.

Find out more about the seven habits of highly effective investments 

E-commerce has been like a massive wave that has washed over much of the traditional retail footprint in the US and Europe. Globally, e-commerce retail sales are projected to hit $6.5 trillion in 2024, from $4.0 trillion in 2020

Question: You say you are a contrarian investor. If we look at your top holdings in the Invesco Asian Fund (UK), such as Taiwan Semiconductor Manufacturing (TSMC) and Samsung Electronics, they don’t seem very contrarian ideas. Have your philosophy and process changed?

Environmental, social and governance (ESG) concerns are an increasingly important consideration for many clients. At Invesco, we have long recognised the significance of assessing ESG related factors as determinants of financial performance.

John Greenwood looks back on what has been an extraordinary year for global economies and provides his outlook for 2021. What can we expect?

Thailand has been held up as a model of a country that has dealt well with the virus. It has only recorded 59 deaths from Covid-19 and there have been no domestic infections since June (the only cases since then have been people coming into the country). Other countries in the region have also performed well: Singapore and Hong Kong have only recorded a total of 132 deaths between them. You might think that these countries have been able to a large extent to get ‘back to normal’, and that stocks which initially were sold off heavily would have rebounded back to where they started the year.

China is a land rich in compelling bottom-up investment opportunities. This is based on our expectations that its domestic economy will emerge as a reliable driver of growth while the increasing digitalisation of Chinese society is opening up new markets which some companies are taking advantage of to enhance their product offerings. While selecting stocks, we favour private enterprises which demonstrate entrepreneurship and possess a notable track record in running businesses for their shareholders.

Historically, equity dividends and fixed income coupons have been an incredibly important component of income investing. However, current macroeconomic forces mean that both are under pressure. Fixed income yields are low and dividends have been, or are, at risk of being cut.

Randall Dishmon discusses his investment philosophy and approach.

In the post COVID-19 era, domestic consumption plays a bigger role in driving economic recovery. Asia, especially North Asia, has the advantage of boosting domestic consumption as the COVID-19 pandemic is largely under control.

“Diversification is the only free lunch in finance” is a cliché which is easy to dismiss but one which captures an important truth: in a world where it is difficult to predict returns, lowering volatility without reducing return is extremely valuable.

Income has been thrown firmly in the spotlight this year with dividend cuts happening across the Financials sector and elsewhere, highlighting the importance of diversifying income sources.

The Invesco Tactical Bond Fund (UK) is our investment philosophy distilled into a single fund. It’s designed to allow us to align risk to reward, both the level and the type, across bond markets as the opportunity set changes. In that way we seek attractive risk-adjusted returns and to achieve income and capital growth over time.

Before the coronavirus pandemic, the scope for traditional policy to respond to the next recession was limited. Interest rates in much of the developed world were close to zero, budget constraints left little room for fiscal expansion and central bank balance sheets had already expanded significantly.

Listen to the replay to hear fund managers Mike Matthews and Thomas Moore discuss their views on fixed income markets and the opportunities they see across the risk spectrum presented by the current environment and beyond, as well as reflecting on the portfolio positioning and performance.

In the 20 odd years that I have been in the financial markets, inflation has rarely ignited as much debate as it is doing right now. I see that in meetings across the Henley investment floor and in numerous blogs and research pieces written by Invesco colleagues worldwide.

Listen to the replay as fund managers from our fixed income, global equities and multi-asset teams discuss the outlook for markets and portfolio ideas to help investors navigate the income dilemma.