In brief
- The second half of the year looks set to be bumpier, but we still expect equity markets to continue their upward path.
- Inflation worries are likely to contribute to the jitters, but it will take a lot of bad news to shift the central banks towards a more rapid withdrawal of easy money.
- Value stocks have significantly outperformed growth stocks so far this year, and the rotation still has room to run.
- The structural case for Asia remains intact, despite reduced enthusiasm for the region at the moment due to worries over policy tightening, vaccine progress and regulation in China.
- Given the increased will to tackle climate change, the 2021 United Nations Climate Change Conference in November is likely to produce a raft of policy, regulation and investment announcements, creating winners and losers within portfolios.
- The role of fixed income in a portfolio is challenged. In our view, investors shouldn’t discard bonds but should seek global bond diversification and look to alternative markets for solutions.
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