M&G Multi Asset team - Where is the value? 2021 mid-year review and outlook

10 min read 8 Jul 21

Please find below a note from the Multi Asset team which reviews market performance so far in 2021. Against a background where value seems difficult to find, the team also indicate the areas of the market that they believe are worthy of consideration for the rest of the year.

The main points to note are:

  • The first half of 2021 has generally been positive for risk assets, with equities continuing to rally as the reopening and recovery theme maintains the upper hand, outweighing concerns about inflation and the Delta variant of the coronavirus.
  • At the moment, investors seem satisfied that the global economy will recover strongly and seem to have accepted major central banks’ view that inflation pressures will be transitory. While this could bode well for further equity market appreciation, it is at times like these that we should be wary of the unexpected.
  • In our opinion, it is appropriate to maintain a balance between risker assets, such as equities, corporate bonds and emerging market bonds and currencies, and more defensive holdings, such as long-dated US Treasuries.

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The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. Past performance is not a guide to future performance.

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