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For equity specialists within BNY Mellon Investment Management, the year ahead looks bright. We asked them for their 12-month outlook, and a clear majority – 80% – said they are either ‘selectively bullish’ or ‘bullish’ about 2021. In contrast, just under 5% said they were ‘selectively bearish’ on markets; and only 15% said they were neutral.
A majority (75%) said they expect volatility to be lower in 2021 than in 2020 – which is perhaps unsurprising given the global impact of the Covid-19 pandemic on markets over the past year.
Clear views also came through when we asked for opinions on specific sectors. Here, a majority (30%) flagged tech stocks as being overvalued. On the flipside of the coin, the value of value seems to be coming through as part of a wider shift in market sentiment, with well over half of our specialists saying stocks in this category are undervalued right now.
Experts from across the five investment firms also highlighted emerging markets as attractive.
In their own words…
As part of the survey we asked respondents to provide their own views about how stock market returns will pan out in 2021. Here are some of those responses:
Word cloud: Where will investors find the best opportunities for income in 2021?
The multi-asset specialist view
In common with their equity-focused peers, our multi-asset specialists appear sanguine about the prospects for the year ahead. Nearly 75% said they were either bullish or selectively bullish about markets going into the New Year, with less than 3% saying they were feeling bearish. Equities (65%) and emerging markets (32%) were their favored choice for positive returns in the coming year.
Within the alternatives space, there was almost equal billing for infrastructure equities (28%), renewable energy (23%) and ‘other’ commodities (ex-gold) as their favored asset class.
All investments involve some level of risk, including loss of principal. Certain investments have specific or unique risks. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment.
Recent market risks include pandemic risks related to COVID-19. The effects of COVID-19 have contributed to increased volatility in global markets and will likely affect certain countries, companies, industries and market sectors more dramatically than others.
Views expressed are those of the author stated and do not reflect views of other managers or the firm overall. Views are current as of the date of this publication and subject to change. This information contains projections or other forward-looking statements regarding future events, targets or expectations, and is only current as of the date indicated. There is no assurance that such events or expectations will be achieved, and actual results may be significantly different from that shown here. The information is based on current market conditions, which will fluctuate and may be superseded by subsequent market events or for other reasons. Forecasts, estimates and certain information contained herein are based upon proprietary research and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. Please consult a legal, tax or financial professional in order to determine whether an investment product or service is appropriate for a particular situation.
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