Global Investment Outlook: September 2021

EM Equities Amidst the Chinese Regulatory Crackdown

China has seemingly chosen to mark the occasion of the 100th anniversary of the founding of their Communist Party with an intense and pervasive regulatory crackdown. The ripple effects of these actions have been felt throughout emerging market equities. Meanwhile, S&P 500 companies continue to beat earnings expectations and investors attempt to navigate inflationary concerns, the possibility of tapering, and increased geopolitical risk.

As the old adage states, institutional investors can't help but continue to pick up pennies in front of the proverbial steamroller. Here we present analysis from top institutional investors on the outlook for global markets in the month of September, with a particular focus on emerging market equities. 

EMERGING MARKETS OUTLOOK

China Opportunities – An active risk management perspective (MFS IM, Sep 2021)

Investment practitioners at MFS Investment Management discuss potential opportunities within China, against the backdrop of the recent regulatory crackdown.

Latest Asia Insights (BlackRock, Aug 2021)

For compliance reasons, this paper is only accessible in the United States and Canada

China’s goal of doubling GDP by 2035 may seem ambitious considering the country’s ageing population. Yet technological advancements and brisk investments in industrial automation mean the economy may be able to reap productivity gains that make Beijing’s growth targets achievable.

Diversification Benefits of Owning Chinese Equities (RBC GAM, Aug 2021)

For compliance reasons, this paper is only accessible in the United States and Canada

RBC Global Asset Management makes the case for a strategic allocation to China A shares for global investors, given their inclusion in global equity indices and other positive attributes.

China’s Correction Toward ‘Common Prosperity’ (PineBridge Investments, Sep 2021)

Regulatory tightening on the heels of the 100th anniversary of China's Communist Party being established has led to a correction in EM equities.

Navigating EM Equity Cross-Currents (Northern Trust AM, Aug 2021)

A shift in the regulatory environment in China has led to a fall from grace for the EM equity asset class in 2021, yet valuations remain attractive.

GLOBAL INVESTMENT OUTLOOK

Portfolio Perspectives – August 2021 (BlackRock)

For compliance reasons, this paper is only accessible in the United States and Canada

The overall direction of BlackRock's strategic tilts has remained stable amid a noisy macro backdrop. Market sentiment has swung between extremes since their last update in May as fears of runaway inflation gave way to concerns over deflationary spirals in the matter of a few months. These swings reflect – in their view – the unusually wide range of significantly divergent yet plausible economic outcomes that potentially lie beyond the economic restart. Having an anchor is important in such an environment. BlackRock maintains high conviction in their new nominal investment theme that implies low real yields – a positive for risk assets – and see market overreactions may create opportunities to readjust portfolios.

Allocation Views: An uneasy truce (Franklin Templeton, Sep 2021)

For compliance reasons, this paper is only accessible in the EMEA region

Franklin Templeton discusses the nimble management style required of global investors in this interesting period of an uneasy truce that is typified by high equity valuations, inflationary concerns, and increased geopolitical risk.

Multi Asset Monthly: Global strategy (NN IP, Sep 2021)

Investors continue to embrace risk assets, and NN Investment Partners equates this to picking up coins in front of an idling steamroller. Meanwhile, the sustainability of the recovery is likely to depend on coronavirus developments, stimulus measures, and the extent to which savings and private investments are released.

The Profits Party Peaks, But the Aftermath Looks Benign (Robeco, Sep 2021)

Corporate earnings have soared recently, with 97% of companies in the S&P 500 reporting positive year-on-year earnings growth and 88% beating expectations. This momentum could be decelerating.

Global Investment Views: Delta, Deceleration, and Divergences (Amundi, Sep 2021)

For compliance reasons, this paper is NOT accessible in the United States

Amundi Asset Management presents a 9-minute podcast on the outlook for global markets, focusing on three themes: the spread of the Delta Covid-19 variant, divergence of policies, and deceleration of economic growth.

Market Views from Byron Wein (Blackstone, Aug 2021)

Byron Wein of Blackstone Group discusses his outlook for global markets as of the end of August, based upon several recent roundtable lunch discussions with other institutional investors.

Investment Traffic Lights: Quarterly edition (DWS, Sep 2021)

DWS presents their quarterly investment outlook and traffic lights chart for global asset classes showing their delineation of positive, negative, and neutral views.