Global Investment View Q3 2021

The Global Investment View for Q3: 2021 distils the outcomes from the most recent meeting of Investec Wealth & Investment’s top strategic minds. Here, experts from the Investec Global Investment Strategy Group (GISG) offer their insights into the factors informing their risk positioning for the quarter, the medium term global outlook, how it will impact the South African economy, and what icebergs may lie ahead. 

The Global Investment Strategy Group (GISG) maintains its neutral risk budget score (0 on a scale of +3 to -3).

The global stimulus programmes launched over the past year have been wildly successful. Global GDP is likely to return to pre-Covid levels within a few months. Analysts and economists have, to a large degree, been caught off guard by material beats across the globe. However, ‘risk assets’ (equity, credit etc.) currently screen as the most expensive since 2001. The global quantitative easing impulse is slowing, suggesting growth has likely peaked.  We are probably also past peak inflation and, while we expect inflation will continue to surprise on the upside, we do not see it staying high enough to cause developed market central banks to call an early end to this cycle. The net result is that we continue to have a neutral allocation to risk with strong economic momentum offsetting elevated valuations.