Equity investors have been more willing to look beyond the health crisis than was first anticipated, according to NN Investment Partners’ Valentijn van Nieuwenhuijzen, who said the 'whatever it takes' attitude being adopted by central banks has provided a "cushion" against continued sharp downfalls.
The chief investment officer said the market rebounds seen since the beginning of April - including the S&P 500 index which has rallied by 29.8% at time of writing (21 July) - have not detracted from the fact there are still plenty of investment opportunities, given the changing environment, supportive central banks and the growth opportunities the pandemic has introduced across certain sectors.
"Massive amounts of policy support gives markets enough of a cushion not to dramatically correct, so it is not something I worry deeply about," he said.
"Of course, one of the big questions is regarding the valuation of US tech stocks - that is one of the main reasons the US has been so much stronger. Of course, it is a sector coming out of the crisis a winner in relative terms.
"I think there are a couple of sectors that will continue to struggle after the crisis such as financials, energy, travel and hospitality. But I think there are still a lot of secular reasons why many stocks have only become stronger, particularly those with digital business models."
That said, van Nieuwenhuijzen said the speed at which markets rebounded, combined with the potential for a re-installment of lockdown measures - could mean there is some form of stockmarket correction during the second half of the year which would "cool down the current v-shaped recovery".
Overall though, he believes stockmarkets will continue their upward trajectory over the longer term.
"I'm a strong believer that you should be careful not to give too much weight to valuations on both sides, whether they are very low or very high, and especially in this type of an environment where there is so much fundamental uncertainty," he said.
"Often, it is more the behaviour of policymakers and of other investors - that behavioural dynamic - that is the most dominant force driving market valuations."
The multi-asset team at NN Investment Partners started the year with an overweight to technology equities, according to van Nieuwenhuijzen, and they remain "overweight or at least neutral".
However, the team has scaled down some of the larger companies slightly as they have rallied so strongly.
"Even though we retain conviction in all of our tech names, we don't want them to get to an uncomfortable size in the portfolios. Our conviction has remained at a positive level, rather than increased," he added.
Not only does the CIO believe the technology sector will continue to perform well, he said it is home to numerous companies exercising strong ESG credentials - something that is of upmost importance to the company.