• Home
  • Equities
    • UK
    • Global
    • Europe
    • US
    • Asia
    • Emerging markets
    • Specialist
  • Bonds
  • Multi-asset
  • ESG
    • ESG
    • Sustainable Investment
    • Sustainable Investing
  • Funds
    • Unit trusts/OEICs
    • Investment Trusts
    • VCTs/EIS
    • Platforms
    • ETFs
    • Pensions
  • Regulation
  • Diversity
  • People moves
  • Events
  • Financial library
  • Industry blogs
  • Digital Edition
  • Newsletters
  • Sign in
    • logged-in-corporate-menuYou are currently accessing Investment Week via your Enterprise account.

      If you already have an account please use the link below to sign in.

      If you have any problems with your access or would like to request an individual access account please contact our customer service team.

      Phone: +44 (0) 1858 438800

      Email: [email protected]

      • Sign in
     
      • Account details
      • Newsletters
      • Contact support
      • Sign out
     
  • Follow us
    • Twitter
    • LinkedIn
    • Newsletters
    • Facebook
    • YouTube
    • Instagram
  • Register
  • Events
    • Upcoming events
      event logo
      Investment Week Select 2021

      Investment Week is delighted to announce the first 2021 date of the popular Select event, taking place on the afternoon of 26th January!

      • Date: 26 Jan 2021
      • ONLINE, ONLINE
      event logo
      Professional Adviser Working Lunches 2021

      A series of invitation only "meet the manager" virtual lunches to discuss how a multi-asset strategy can benefit your clients and your business.

      • Date: 24 Feb 2021
      • ONLINE, ONLINE
      event logo
      Fund Selector Briefing: Scotland 2021

      Investment Week's Fund Selector Briefing: Scotland 2021 is taking place live online on 25th February from 09:00 - 12:35. Aimed at senior investment professionals involved in the fund selection process, this event will provide the opportunity to hear from, and question, fund managers and networking with your peers.

      • Date: 25 Feb 2021
      • ONLINE, ONLINE
      event logo
      Professional Adviser Awards 2021

      Professional Adviser is once more issuing the call for adviser businesses from across the UK to showcase their knowledge, skills and commitment to client care by entering our 2021 Awards.

      • Date: 11 Mar 2021
      • ONLINE, ONLINE
      View all events
      Follow our events

      Sign up to receive email alerts about our events

      Sign up

  • White papers
    • Fidelity logo whitebackground1200 630px 1 120x194
      The ETF Evolution

      In this exclusive magazine exploring the evolution of quality and income ETF strategies, King reveals that each ETF follows an investment strategy developed by the group's in-house research team that leverages fundamental active insights to inform the factor definitions and applies portfolio construction principles to mitigate the unintended biases.

      Download
      7ded04ac5957a69da8d1df41c8f21a0c33988d8f 1 120x194
      A bet on the UK bounce back

      David Cumming, Aviva Investors' chief investment officer for equities, last year witnessed turbulent times for UK equities but he remains positive about the market in which he has a personal as well as a professional stake.

      Download
      Find white papers
      Search by title or subject area
      View all white papers
  • Industry blogs
  • Digital Edition
Investment Week
Investment Week
Sponsored by BMO
  • Home
  • Equities
  • Bonds
  • Multi-asset
  • ESG
  • Funds
  • Regulation
  • Diversity
  • People moves
  • logged-in-corporate-menuYou are currently accessing Investment Week via your Enterprise account.

    If you already have an account please use the link below to sign in.

    If you have any problems with your access or would like to request an individual access account please contact our customer service team.

    Phone: +44 (0) 1858 438800

    Email: [email protected]

    • Sign in
 
    • Account details
    • Newsletters
    • Contact support
    • Sign out
 
  • Trending
  • IW 18 Jan issue
  • Past IW issues
  • Reboot. campaign
  • Sustainable Investment Festival
  • Bitcoin
  • Global

A whole new world: Market recovery on the way but do not expect a return to the old normal

Deep Dive into global equities

Darius McDermott of Chelsea Financial Services
Darius McDermott of Chelsea Financial Services
  • Darius McDermott
  • 14 January 2021
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Share on Whatsapp
  • Send to  
0 Comments

Chaos, uncertainty and change – three words that have become synonymous with the global economy in 2020, as the world sought to get to grips with the Covid-19 pandemic while trying to understand what the 'new normal' looked like.

The sell-off in February and March 2020 was a chastening experience for all of us, but equally surprising has been the resiliency seen in markets since April - a move facilitated by the fast and aggressive intervention by central banks across the globe.

Not only have the majority of the major global markets recouped most of the losses seen in the first quarter, but the recent vaccine bounce has paved the way for further optimism that a sustained 'V'-shaped recovery is now on the table going into 2021. 

Related articles

  • Market Movers Blog: M&A disputes "inevitable" as the financial impact of 2020 takes hold
  • Thematic, systematic, pragmatic: Why multi-strategy investing still has a place in 2021
  • Industry warns it will get worse before it gets better as UK nears double-dip recession
  • Timing is everything during pandemic: How investors can ride the second wave and not drown in it
  • GDP falls 2.6% in November as UK nears double-dip recession

Welcome to the #neversell era: How the latest incarnation of Nifty Fifty firms is packing a punch

Even prior to the vaccine announcements, figures from the International Monetary Fund had global growth estimated at 5.2% for 2021 (versus a 4.4% contraction in 2020).

While there is cause for optimism, I do not think it is going to be a case of going back to normal anytime soon given the trauma we have seen. 

Valuations are an interesting starting point given they come into 2021 on the back of a strong rally. Traditional valuation metrics such as the price-to-earnings ratio appear elevated when compared to historical averages. 

A recent note from Morgan Stanley acknowledges this, but also notes valuations are uneven - citing the fact that Covid-19 cases and geopolitical uncertainty are still muting investor sentiment.

There is also the impact of accelerated structural change on valuations. Invesco senior portfolio manager Randall Dishmon cites the generational changes occurring in the likes of e-commerce, cloud software, medical diagnostics and digital payments, adding the market continues to underestimate the sustainability of growth for leading companies in these areas.

Something Dishmon also mentioned, which I strongly agree with, is that targeting companies because they are historically cheap can also be damaging, as they will not be protected from those structural changes that some of these companies are on the wrong side of.

A little went a long way: Why 2020 was the year of the small cap

According to T. Rowe Price Global Focused Growth Equity manager David Eiswert, broad-based valuations are not extreme, but certain areas in mid and large caps do look expensive. 

Despite the rationale behind their growth, Eiswert is conscious to manage the valuation element of risk in his portfolio and has reduced positions in some of the outright Covid-19 winners - reinvesting into high quality product and innovation-driven cyclicals.

12
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Share on Whatsapp
  • Send to  
  • Topics
  • Global
  • Markets
  • Equities
  • Deep Dive
  • global equities
  • global markets
  • fund manager views
  • Covid-19
  • coronavirus
  • pandemic
  • public health
  • global trade
  • coronavirus vaccine
  • vaccine
  • Equity markets
  • Darius McDermott
  • Chelsea Financial Services

More on Global

Mitchell Todd of T. Rowe Price
T. Rowe Price launches first dedicated UK investment strategy
Market Movers blog: What's the latest in markets?
Market Movers Blog: M&A disputes "inevitable" as the financial impact of 2020 takes hold
Bob Michele of J.P. Asset Management
Is the only way up? Five surprising market predictions for 2021
The price of Bitcoin at one point breached the $40,000 mark this month
Seeing both sides of the same coin: Wealth managers split on Bitcoin amid growing adoption and wild price swings
Adrien Pichoud of SYZ Private Banking
Timing is everything during pandemic: How investors can ride the second wave and not drown in it

Most read

Adviser launches petition to stop UK cryptocurrency transactions
Adviser launches petition to stop UK cryptocurrency transactions
Quilter takes action as impersonation scams continue to rise
Quilter takes action as impersonation scams continue to rise
Baillie Gifford's James Anderson: Amazon could be nearing 'day two'
Baillie Gifford's James Anderson: Amazon could be nearing 'day two'
From evolution to revolution: Investment trust sector urged to grow in order to 'stay relevant'
From evolution to revolution: Investment trust sector urged to grow in order to 'stay relevant'
Market access: All eyes turn to equivalence question as Brexit deal is completed
Market access: All eyes turn to equivalence question as Brexit deal is completed
blog comments powered by Disqus
Back to Top
Trustpilot

 

  • Contact us
  • Marketing solutions
  • About Incisive Media
  • Terms and conditions
  • Policies
  • Careers
  • Twitter
  • LinkedIn
  • Newsletters
  • Facebook
  • YouTube
  • Instagram

© Incisive Business Media (IP) Limited, Published by Incisive Business Media Limited, New London House, 172 Drury Lane, London WC2B 5QR, registered in England and Wales with company registration numbers 09177174 & 09178013

Digital publisher of the year
Digital publisher of the year 2010, 2013, 2016 & 2017
Loading