Video: Outlook 2021 - time for investors to stop hibernating

Keith Wade, Chief Economist & Strategist:

“This is the first year in my 30-year career of forecasting the world economy, that I can remember such enormous switches and falls in GDP. There is still a risk of what we call a ‘W shape’ – a double dip recession – where Europe or the US could go back into recession later on this year as more lockdowns are introduced.”

“Looking forward, as recovery comes through, people will begin to think about interest rates going up and inflation going higher. It is possible that inflation beings to pick up, but I think it will be very slow because there is lots of spare capacity in the world economy at the moment.”

“Asia appears to have handled the pandemic better, and it looks to be in much better shape than the west as the world emerges from the crisis. The focus on goods and technological production, healthcare, has meant that that region has done particularly well.”

Johanna Kyrklund, Chief Investment Officer and Global Head of Multi-Asset Investment:

“Our models are now pointing to recovery and an ‘early Spring’. The vaccine news is encouraging because it significantly reduces uncertainty. We’ll still need governments’ stimulus to support us while we wait for the vaccine.”

“We believe that governments should be able to run the economy hot. Also, we’ve seen an acceleration in disruptive trends, which are very exciting to us as active investors.”

“Overall, we are positive on equities because with the recovery on the horizon, we think it’s time to shift out the ‘stay at home stocks’ that outperformed in 2020 and shift into the more cyclical areas of the market. It’s time to stop hibernating!”

Important Information
The contents of this document may not be reproduced or distributed in any manner without prior permission.
This document is intended to be for information purposes only and it is not intended as promotional material in any respect nor is it to be construed as any solicitation and offering to buy or sell any investment products. The views and opinions contained herein are those of the author(s), and do not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. The material is not intended to provide, and should not be relied on for investment advice or recommendation. Any security(ies) mentioned above is for illustrative purpose only, not a recommendation to invest or divest. Opinions stated are valid as of the date of this document and are subject to change without notice. Information herein and information from third party are believed to be reliable, but Schroder Investment Management (Hong Kong) Limited does not warrant its completeness or accuracy.
Investment involves risks. Past performance and any forecasts are not necessarily a guide to future or likely performance. You should remember that the value of investments can go down as well as up and is not guaranteed. You may not get back the full amount invested. Derivatives carry a high degree of risk. Exchange rate changes may cause the value of the overseas investments to rise or fall. If investment returns are not denominated in HKD/USD, US/HK dollar-based investors are exposed to exchange rate fluctuations. Please refer to the relevant offering document including the risk factors for further details.
This material has not been reviewed by the SFC. Issued by Schroder Investment Management (Hong Kong) Limited.