2021: What kind of recovery?
Due to the COVID-19-related lockdown measures, 2020 will go into the record books as the year that saw the deepest global recession in peacetime. For 2021, we expect global growth to rebound, both in emerging and developed economies:
- Slow recovery amid recurring restrictive measures in developed countries;
- Emerging and developing market will show a cautious and uneven recovery;
- With debt levels at record highs and an uncertain economic outlook, we maintain a cautious asset allocation
- Impact opportunities, especially in Europe and Japan.
The social, political and economic environment is likely to remain highly uncertain in the coming years. The tailwinds of the last four decades, favouring higher returns, have changed into headwinds leading to lower expected long-term returns across the board.
The financial industry should therefore look at returns in a different way. A different, more forward-looking approach is needed to see what the long-term returns of investments might be. The challenges we face - degradation of ecosystems, the loss of biodiversity, the rising inequality and polarisation in and between societies - should be taken into account in every strategic asset allocation framework.
Download our Investment Outlook for 2021 and/or watch the Outlook webinar and learn more about the challenges you are facing as an investor and how you can mitigate the risks and get the best chances of positive long-term returns through investing in impact and transitions.