Columbia Threadneedle Investments

2021 Market outlook - Knowns and unknowns after a tumultuous year

After a tumultuous year and with significant uncertainty ahead, William Davies, Chief Investment Officer, EMEA at Columbia Threadneedle Investments, outlines his outlook for 2021.
» Download outlook

  • We see three themes dominating 2021: the development of a Covid-19 vaccine; the political make-up of the US following the November election; and Brexit.
  • Our research intensity powers our understanding of these themes, trends and events, and positions us strongly to navigate through financial markets for our clients.
  • Following unprecedented levels of stimulus we expect the level of debt is going to be even greater than it was after 2009 and we will emerge into a world of low inflation, low growth and low interest rates – not a backdrop where economic sensitivity is likely to outperform over the longer term.
  • Instead, we believe this environment will favour the type of investments that Columbia Threadneedle Investments makes – long duration assets and durable growth companies with: sustainable returns driven by a sizeable moat, a high Porter’s Five Forces score, strong environmental, social and governance credentials and sustainable competitive advantage. We want risk within portfolios, but we want controlled risk.
  • The UK equity market is currently clearly cheaper than others and may benefit if we see the recovery we expect to see over the next 9-12 months; Europe and Japan are in a similar position. Longer term, we can see further potential in the US and Asia/emerging markets.
  • We like an element of risk within credit, but we believe investment grade is ultimately a better home for it than high yield, where we see a greater risk from higher financial leverage, particularly when coupled with high operational leverage.
  • As active managers we have performed strongly throughout the pandemic crisis, using our knowledge, expertise, collaborative skills and research capabilities to remain calm. This consistent approach will continue to be followed in 2021, helping us identify trends and investment opportunities, whatever next year may bring.

Columbia Threadneedle Investments Switzerland
Eva Maria Hintner
Country Head Switzerland
Threadneedle Portfolio Services AG
» +41 43 502 0301
» evamaria.hintner@columbiathreadneedle.com
Michael Maeder
Sales Director – Financial Institutions
Threadneedle Portfolio Services AG
» +41 43 502 0303
» michael.maeder@columbiathreadneedle.com
Benjamin Boyer
Sales Director – Financial Institutions
Threadneedle Portfolio Services AG
» +41 22 591 7908
» benjamin.boyer@columbiathreadneedle.com
Abigail Ayodele
Client Service
Threadneedle Portfolio Services AG
» +41 43 502 0308
» abigail.ayodele@columbiathreadneedle.com

This document is intended for informational purposes only and should not be considered representative of any particular investment. This should not be considered an offer or solicitation to buy or sell any securities or other financial instruments, or to provide investment advice or services. Investing involves risk including the risk of loss of principal. Your capital is at risk. Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. The value of investments is not guaranteed, and therefore an investor may not get back the amount invested. International investing involves certain risks and volatility due to potential political, economic or currency fluctuations and different financial and accounting standards. The securities included herein are for illustrative purposes only, subject to change and should not be construed as a recommendation to buy or sell. Securities discussed may or may not prove profitable. The views expressed are as of the date given, may change as market or other conditions change and may differ from views expressed by other Columbia Threadneedle Investments (Columbia Threadneedle) associates or affiliates. Actual investments or investment decisions made by Columbia Threadneedle and its affiliates, whether for its own account or on behalf of clients, may not necessarily reflect the views expressed. This information is not intended to provide investment advice and does not take into consideration individual investor circumstances. Investment decisions should always be made based on an investor’s specific financial needs, objectives, goals, time horizon and risk tolerance. Asset classes described may not be suitable for all investors. Past performance does not guarantee future results, and no forecast should be considered a guarantee either. Information and opinions provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. This document and its contents have not been reviewed by any regulatory authority.
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