Not all geeks are American
The movers and shakers of the future could be anywhere
Growth vs value?
The quality and visibility of company profits are what matter
Net zero growth
Will the green transition help or hinder economic expansion?
Paying down the debt
Beware the growing pile of gilts as the UK’s credit card bill comes due
Our lead article looks at the buzzword of the moment — stagflation. As investors’ fears of the potential stagnation of output coupled with rising inflation ebbed and flowed, equity and bond markets experienced some volatiliy. What will this uncertainty mean for the year ahead?
On page 5, we look at the domination of the markets by US-based tech firms, as we ask if all the geeks are American. Where should we look to for the next wave of tech innovation (and investment opportunity) — and is it necessarily going to come from across the pond?
After the initial wave of selling amid the first lockdowns in March 2020, global equity markets have been on a more or less upward path, but leadership has shifted from one style to another. But rather than focus on styles, such as ‘growth’ versus ‘value’, we explain why we think the best approach is to look for companies with quality and durability of earnings growth, whatever style category they might fit into.
On page 8, we explore whether the transition toward a world of net-zero carbon emissions will boost overall economic output or hinder it. There is hope that it could have a net positive effect, but governments and business need to start taking action now to avoid a more disruptive transition.
Lastly, on page 9, we focus on the UK’s large ‘credit card’ bill, as pandemic related borrowing starts to come due. Having borrowed more in the 2020/21 fiscal year than at any time since records began in 1946, more of this debt will have to be absorbed by the market if the Bank of England starts to wind down its purchases of gilts this year. That’s one of a number of factors that make us cautious about UK gilts. Please visit rathbones.com to find out more about our latest views.
We hope you enjoy this edition of InvestmentInsights.
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