Four challenges for multi-asset investors for H2 2021

June 2021 | Paul Niven, Managing Director, Portfolio Manager and Head of Portfolio Management, Multi Asset Solutions

The past 18 months have been a wild ride for investors, with global equities reaching all-time highs in early 2020 before sharp declines amidst some of the highest levels of volatility ever seen, with around one-third wiped off the value of global equities.

Despite the scale of these downward moves, markets bounced back quickly and were predominantly back to pre-pandemic levels by the fourth quarter last year; yet despite the continuing easing of restrictions in many countries as we move through 2021, there remain challenges for multi-asset investors:

1. Earnings: how long can companies continue to beat expectations and is market optimism overdone?
2. The virus: should multi-asset investors be factoring in a potential setback in the easing of restrictions from recurring new variants, and waiting until the emerging world has made more vaccine progress before putting more risk on the table?
3. Tapering of financial support: could this mean that the boost from pent-up demand is short-lived, or even reversed, and what does this mean for consumer spending in the second half of the year?
4. Inflation: should multi-asset investors be adjusting their portfolios for potentially higher longer-term inflation?

Paul Niven, Head of Portfolio Management, Multi-Asset Solutions talks through these challenges and explains how investors can actively navigate them in their multi-asset portfolios.

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