2021 Market outlook - Knowns and unknowns after a tumultuous year

After a tumultuous year and with significant uncertainty ahead, William Davies, Chief Investment Officer, EMEA at Columbia Threadneedle Investments, outlines his outlook for 2021.
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• We see three themes dominating 2021: the development of a Covid-19 vaccine; the political make-up of the US following the November election; and Brexit.
• Our research intensity powers our understanding of these themes, trends and events, and positions us strongly to navigate through financial markets for our clients.
• Following unprecedented levels of stimulus we expect the level of debt is going to be even greater than it was after 2009 and we will emerge into a world of low inflation, low growth and low interest rates – not a backdrop where economic sensitivity is likely to outperform over the longer term.
• Instead, we believe this environment will favour the type of investments that Columbia Threadneedle Investments makes – long duration assets and durable growth companies with: sustainable returns driven by a sizeable moat, a high Porter’s Five Forces score, strong environmental, social and governance credentials and sustainable competitive advantage. We want risk within portfolios, but we want controlled risk.

• The UK equity market is currently clearly cheaper than others and may benefit if we see the recovery we expect to see over the next 9-12 months; Europe and Japan are in a similar position. Longer term, we can see further potential in the US and Asia/emerging markets.
• We like an element of risk within credit, but we believe investment grade is ultimately a better home for it than high yield, where we see a greater risk from higher financial leverage, particularly when coupled with high operational leverage.
• As active managers we have performed strongly throughout the pandemic crisis, using our knowledge, expertise, collaborative skills and research capabilities to remain calm. This consistent approach will continue to be followed in 2021, helping us identify trends and investment opportunities, whatever next year may bring.

Columbia Threadneedle Investments Switzerland
 
Eva Maria Hintner
Country Head Switzerland
Threadneedle Portfolio Services AG
Zurich
» +41 43 502 0301
» evamaria.hintner@columbiathreadneedle.com
 
Michael Maeder
Sales Director – Financial Institutions
Threadneedle Portfolio Services AG
Zurich
» +41 43 502 0303
» michael.maeder@columbiathreadneedle.com
 
Benjamin Boyer
Sales Director – Financial Institutions
Threadneedle Portfolio Services AG
Geneva
» +41 22 591 7908
» benjamin.boyer@columbiathreadneedle.com
 
Abigail Ayodele
Client Service
Threadneedle Portfolio Services AG
Zurich
» +41 43 502 0308
» abigail.ayodele@columbiathreadneedle.com

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