Funds

When it comes to what the likely agenda of the new administration of U.S. President Joe Biden will be in the first 100 days, the most relevant question may be this: Of all the things the administration wants to accomplish, which ones will it actually be able to deliver on?

The world will be a different place when we are no longer required to don masks and understanding how will be key to successful long-term investing, says Bill Adams from MFS.

The last year has been characterised by gloomy headlines but a counter-intuitively buoyant stock market. Even experienced investors who understand that this is how markets work are starting to call time on the remarkable rally since last spring.

Markets held steady in December as investors responded favourably to positive vaccine news and a foreseeable end to the US election hysteria. However, we’re not out of the woods yet, suggests Sebastian Mullins from Schroders.

Reasonable financial market returns masked a tumultuous year as investors continue to search for patterns in the market’s erratic behaviour. More surprises rolled in over December, with share prices oscillating wildly, commodity prices remaining depressed and cheap valuations overtaking business fundamentals.

This time last year we were getting ready for the ‘known unknowns’ – the unpredictable events that we nevertheless knew were on their way. In the end, of course, the year was dominated by the mother of all ‘unknown unknowns’.

GAM Investments’ Julian Howard outlines his latest multi-asset views, discussing the equity market’s counter-intuitive positive performance in the pandemic year of 2020 and the navigating investors will have to do around near-term recovery and long-term stagnation.

US capitalism was built on large societal divisions, but sometimes such becomes intolerable and the majority of the population revolts. In this case, the virus accentuated the income divide and engendered even greater angst.

The widespread adoption of digital solutions during 2020’s lockdowns is likely not going away as businesses and households further embrace the technology-based themes reshaping the global economy, says Portfolio Manager Denny Fish.

With the spectre of COVID-19 now diminishing in the wake of new vaccines, some investors are rightly refocusing their attention on longer-term risks and fundamentals.

We are cautiously optimistic toward Australian equities in 2021, the only developed equity market that is favoured as an overweight by our global multi‑asset colleagues. Short‑term costs and disruption from the coronavirus do not detract from the longer‑term attractions.

The Goldilocks environment is back, but bears are lurking in the shadows. Francois de Bruin from Aviva Investors explores the risks and opportunities that need to be managed to get outcomes that are “just right”.

As 2020 comes to a close, Rob Almeida from MFS Investment Management reflects on the past year and discusses the responsible allocation of capital as we head into 2021.