Investing by thematic: deciphering the trends
Growing populist politics have meant that policymakers will be forced into increasing unorthodox polices such a modern monetary theory, but what does this mean for traditional diversification strategies? How should investors allocate during a time of converging signals of uncertainty that call into question the recovery of the global economy?
Aron Pataki, portfolio manager, Newton Investment Management
Moderator: Colin Tate, chief executive, Conexus Financial
- We are entering into a new cycle that is likely to see low growth and higher volatility whereby certain trends will be exacerbated such as de-globalisation and a trend towards localisation on both a national and regional level.
- Around the world we are likely to see modern monetary theory become more mainstream as QE runs its course.
- Many governments will look to recover from the coronavirus lockdowns through fiscal stimulus directed towards new infrastructure related to renewables energies, electric vehicles and 5G data centres.
Which asset class will make the most money for investors over the next 12 months?
- Government bonds
- High yield credit
- EM debt
What role do themes play in your portfolio construction process?
- >10% to <20%
- >20% to <40%
- >40% to <50%