While we expect an economic recovery in 2021 and the world to look more ‘normal’ than it has since the start of Covid-19… trends have emerged during this crisis that will persist for many years to come.
Here Amber Fairbanks offers her thoughts on the key factors driving the investment environment in 2021.
Covid-19: The World Will Return to ‘Normal’
While we expect an economic recovery in 2021 and the world to look more ‘normal’ than it has since the start of the pandemic, we think trends have emerged during this crisis that will persist for many years to come and affect growth opportunities over the long term.
The digitalisation of the economy accelerated as people worked from home and increasingly shopped online, two trends likely to continue after Covid. Healthcare is likely to see increased spending and political support as governments acknowledge their shortcomings in addressing the pandemic. Government spending has been significantly stretched around the world, limiting states’ capacities to further support their economies in the event of another crisis.
The Mainstreaming of ESG
There has been tremendous growth in ESG in the last several years and asset managers are increasingly looking to brand strategies this way to capture a portion of the fund flows.
While there have been some managers that have done this in a thoughtful, value-adding way, several more have done so in ways that add little if any value to investment outcomes because it is in no way a meaningful or intentional part of the process.
The proliferation of so-called ESG strategies, a trend we think will continue given increased investor interest, has made it increasingly important for investors to understand how a manager is integrating ESG in their investment process to ensure it is deployed in a way that is both material and intentional.