2021: A year of hope and challenge

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December 15, 2020
 

In our second annual sentiment survey we asked our fund managers and analysts for their views on the year ahead. Read on to learn their views on what 2021 may bring.

If 2020 was the year that wasn’t, 2021 looks like the year that will be. Already, successful vaccines have been tested and roll-out has begun. Lockdowns continue but many major economies are expected to recover. For now, at least, there seems to be light at the end of the pandemic tunnel. What this means for markets in the coming 12 months remains an open question, however.

One school of thought says we can look forward to the mother of all resurgences fueled by sky-high savings rates and pent-up demand. Supercharged index returns at the end of the year point to the same conclusion. The ‘everything rally’, for example, saw the MSCI All-Country World index climb another 12.2% in November alone — its best month on record — to touch new all-time highs.2

Those of a less Panglossian mind-set, however, point to lasting damage wrought by Covid-19, with unemployment and the economic dislocation caused by multiple lockdowns taking the fire out of any recovery as the year wears on. Others point to a more nuanced reading, noting the potential for some parts of the world to bounce back relatively quickly even as other regions struggle to make headway. Given such an uncertain backdrop, the results of BNY Mellon Investment Management's second annual sentiment survey makes for interesting reading. As in previous years, our aim was to sample views across five of our investment firms with BNY Mellon IM.3 In total, we received responses from 106 fund managers and analysts, with opinions on everything from the pace of any economic resurgence, to the scope for rising volatility, to the best place to find income in a low-yield world.

Some of this year’s stand-out responses are illustrated on the interactive infographic above (click here for a larger view)4. Who would have thought that this year Asia would overtake the US as the region considered most likely to present investment opportunities? Or that there would be so little consensus on the most pressing risk in the year ahead?

As ever, we can only know what we can know – but we hope our Markets2021 coverage will provide at least some guidance on the likely direction of travel in the year ahead.

1 Charts are provided for illustrative purposes and are not indicative of the past or future performance of any BNY Mellon product. Projections or other forward-looking statements regarding future events, targets or expectations, are 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.

2 Financial Times: ‘The ‘everything rally’: vaccines prompt wave of market exuberance’, December 3, 2020.

3 Alcentra, Insight, Mellon, Newton and Walter Scott.

4 This link directs you to a third-party website. BNY Mellon accepts no responsibility for content on these third-party sites or for the services provided. Also, please be aware that when you access this site, you may be subject to that site's terms of service and privacy policy rules (i.e., sharing of personal information), which you should review carefully before proceeding.

 

Risks:

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. Newton and/or the Newton Investment Management brand refers to Newton Investment Management Limited. Newton is incorporated in the United Kingdom (Registered in England no. 1371973) and is authorized and regulated by the Financial Conduct Authority in the conduct of investment business. Newton is a subsidiary of The Bank of New York Mellon Corporation. Newton is registered with the SEC in the United States of America as an investment adviser under the Investment Advisers Act of 1940.

Newton’s investment business is described in Form ADV, Part 1 and 2, which can be obtained from the SEC.gov website or obtained upon request.

BNY Mellon holds 100% of the parent holding company of BNY Alcentra Group Holdings Inc., which is comprised of the following affiliated companies: Alcentra Ltd. and Alcentra NY, LLC

Investment advisory services in North America are provided through two different investment advisers registered with the Securities and Exchange Commission (SEC), using the brand Insight Investment: Insight North America LLC (INA) and Insight Investment International Limited (IIIL). The North American investment advisers are associated with other global investment managers that also (individually and collectively) use the corporate brand Insight Investment and may be referred to as “Insight” or “Insight Investment”.

Mellon is a global multi-specialist investment manager dedicated to serving our clients with a full spectrum of research-driven solutions. Mellon Investments Corporation (Mellon) is a registered investment adviser and an indirect subsidiary of The Bank of New York Mellon Corporation.

Walter Scott & Partners Limited (Walter Scott) is an investment management firm authorized and regulated in the United Kingdom by the Financial Conduct Authority in the conduct of investment business. Walter Scott is a subsidiary of The Bank of New York Mellon Corporation.

BNY Mellon Investment Management is one of the world’s leading investment management organizations and one of the top U.S. wealth managers, encompassing BNY Mellon’s affiliated investment management firms, wealth management organization and global distribution companies. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may also be used as a generic term to reference the Corporation as a whole or its various subsidiaries generally. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission.

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