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2021 Investment Outlook

As you look ahead to 2021, we invite you to explore actionable insights and investment trends across all major asset classes curated from our marketplace of ideas — more than 800 investors strong.

 

Views expressed are those of the authors and are subject to change. Other teams may hold different views and make different investment decisions. The value of your investment may become worth more or less than at the time of original investment. While any third-party data used is considered reliable, its accuracy is not guaranteed. For professional or institutional investors only.

Seeing a surer path to a safe and effective vaccine, Wellington investors are more confident about an economic recovery in 2021, and many believe this could be the catalyst for a rotation from growth- to value-oriented exposures. These views have translated into a moderately pro-cyclical risk posture within fixed income, favoring higher-yielding sectors, such as leveraged loans and EM corporate debt.

Even as we hope to put the pandemic in the rearview mirror in 2021, we believe it has accelerated and reinforced many long-term, seismic shifts in how we live and work, creating secular opportunities across asset classes worthy of closer examination. Our sustainable investment experts believe, for example, that the defining issues of the past year have reinforced the need for market participants to mobilize capital toward generating positive social and environmental outcomes while aiming to deliver strong financial results. Our investors in alternatives space examine the long-term implications of risk assets becoming more illiquid in risk-off environments.

Dig deeper into these ideas in the chapters summarized below, as we build our 2021 Investment Outlook over the coming weeks:

  • Multi-asset and global economic — November 20
  • Equity and fixed income — December 1
  • Sustainable and alternatives — December 8

2021 Fixed Income Outlook

More positives than negatives
Despite persistent risks and challenges in today’s extraordinary environment, Fixed Income Portfolio Managers Rob Burn and Campe Goodman see areas of value and opportunity for fixed income investors. Heading into 2021, their risk posture is moderately pro-cyclical, they favor US bank-loan and EM corporate-debt sectors, and they urge investors to stay long credit and maintain some cash exposure.

2021 Equity Outlook

We ask whether equity factor extremes signal risk; examine the role of ESG in identifying durable businesses; look at value investing from traditional, contrarian, and quality perspectives; explore investable themes across emerging markets; and highlight innovation-driven opportunities accelerated by the global health crisis.
Are equity factor extremes signaling risk ahead?
The growing importance of ESG integration
Perspectives on value investing
EMs: With great challenges come great opportunities
Harnessing disruption: Highly investable innovations

2021 Multi-Asset Outlook

Is the rotation for real?
Will 2021 bring another roller-coaster ride for markets? Will there be a catalyst for value to outperform? Is there still room for credit to run? Nanette Abuhoff Jacobson and Daniel Cook offer their investment thesis for the coming year, and consider the asset allocation implications.
Turn the page: A thematic playbook for 2021
Nick Samouilhan lays out three areas of secular investment opportunity that he finds attractive heading into 2021: sector and thematic equity, opportunistic fixed income, and alternatives.

2021 Global Economic Outlook

A great-power world
Great-power competition, climate change adaptation, and COVID-19 recovery: Thomas Mucha describes the forces he believes will shape macro and market events in 2021.
A temporary crisis but a permanent fiscal response?
After a decade dominated by central bank liquidity, John Butler thinks that fiscal policy is likely to take center stage.
Brexit: Prepare for more policy stimulus
Whatever the outcome of the Brexit negotiations, John Butler believes that there will probably be more monetary and fiscal stimulus than the market is expecting.