The beginning of a new economic and profit cycle. 2021 should see strongly synchronised global growth, as suddenly liberated animal spirits permeate both consumer and business behaviour. This will see strong employment and investment growth. However, whatever-it-takes monetary and fiscal policy will likely be with us for the foreseeable future.
Global Investment View Q1 2021
Your look into the most important investor insights for the quarter
Introduction to the latest quarter
The Global Investment View for Q1: 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.
Executive view of the quarter
The Global Investment Strategy Group (GISG) has increased its risk budget score from neutral to positive (from a score of 0 to 0.5, on a scale of +3 to -3).
The increase in the risk position reflects the GISG view that the fundamentals for risk assets (that is, growth expectations) have materially improved since our last GIV publication. Although the pricing of risk assets looks fair relative to current consensus expectations, near term hurdles aside, we believe the probability of positive surprises materially outweighs the likelihood of negative ones.
We therefore believe that the improved outlook is not fully reflected in the pricing of risk markets, and an attractive spread between risk assets and insurance assets is in prospect.
The increase in the risk position reflects the GISG view that the fundamentals for risk assets (that is, growth expectations) have materially improved since our last GIV publication. Although the pricing of risk assets looks fair relative to current consensus expectations, near term hurdles aside, we believe the probability of positive surprises materially outweighs the likelihood of negative ones.
We therefore believe that the improved outlook is not fully reflected in the pricing of risk markets, and an attractive spread between risk assets and insurance assets is in prospect.
Download the latest investment insights from Q1: 2021
It is the view of both the GISG and the SA asset allocation committee that we can expect further US dollar weakness over the coming 12 to 18 months. This is due in part to a global “risk-on” trade and in part due to economic performance in developed markets (ex US) exceeding that of the US .
Chris Holdsworth, Chief Investment Strategist, Investec Wealth & Investment SA
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Read the full report for Q1
Find out why the Global Investment Strategy Group has increased its risk budget score to risk on from neutral previously.
More insights from the GISG
Read more articles and thought leadership from the investment experts of the GISG.