Even as a vaccine light at the end of the pandemic tunnel grows brighter every day, institutional investors are still predicting significant headwinds in the near term as social, political and economic upheaval continues to dominate headlines and roil markets. The economic effects of the pandemic in many ways significantly altered the financial landscape that faced investors at the beginning of 2020, and while the core issues—fee pressures, low rates, volatility—have not fundamentally changed, they have been greatly exacerbated. But among the uncertainty lies opportunity.
Even as many investors begin 2021 in defensive postures, there is a case to be made that those who adopt aggressive, active postures throughout the year may be best positioned to benefit the most from any significant economic rebounds. An increased risk appetite could mean outsized returns for those with the mettle to put money to work in sectors such as emerging market equities and alternatives, including Bitcoin, private debt and private equity.
At this year’s Bloomberg Invest Global we will again focus on the key issues driving institutional investment strategies, offering valuable insights from top investors on how smart money can safely navigate an uncertain and risky environment. We’ll take the measure of the recovery and put 2021’s most popular strategies under the microscope to see what has worked and what hasn’t as we look ahead to 2022.
Despite robust growth through the first two quarters of this year, the economic effects of the pandemic continue to be a drag on significant sectors as demand has outstripped supply slowing growth. When will the world return to pre-pandemic levels and how long will it take to get there?
Policy matters more than ever
From pandemic response to stimulus efforts, policy makers received mixed reviews in 2020, but one thing seems certain—politics might dominate the headlines but it’s going to be policy that drives prosperity into the future.
The test for active management
While 2020 did not necessarily produce the outperformance many active managers had hoped for, despite the predictions proponents made regarding the importance of active management during the crisis, neither did 2020 put a nail in active’s coffin. With negative interest rates and volatility top of mind for many investors, there is still room and time for active managers to adjust strategies to outperform their passive counterparts.
Bitcoin: The Trillion Dollar Question
Despite ongoing volatility and a lack of general understanding of BTC as an asset class, there is no denying that Bitcoin is at least on the minds of every major investor in 2021. As Bitcoin’s market capitalization steadily inches toward $1 trillion USD, the otherworldly returns and the beginnings of institutional frameworks for custodianship and regulation are giving the world’s leading digital currency much-needed heft when it comes to convincing the markets’ biggest players of its staying power.
The hunt for yield and allocation
Even as defensive positions will likely rule the day, the hunt for yield will dictate new tactics when it comes to allocations. A trim in U.S. equities could mean more money to allocate to emerging market, European, and Asian stocks. Likewise, fixed income portfolios might see an increase in ESG/green bonds to offset potential negative rates; and alternatives could also see a boost as investments in private equity, private debt, infrastructure, gold, and cryptocurrencies.
Equity strategy .
Time will tell whether a focus on value, small cap and emerging markets will be a winning formula for 2021, but indicators point to strengthening performance amid rising allocations to riskier segments of the equity market as risk tolerance grows, backed by stronger earnings momentum and easing macro pressures.
Invest Talks Series
Bloomberg Invest Talks is our ongoing virtual series designed to help investors navigate this dynamic period by tapping into the perspectives of top global investors, financial executives, regulators, and policy makers in conversation with Bloomberg’s top journalists and analysts.
Marc Rowan Co-Founder and CEO Apollo Global Management
Mark Carney Vice Chair Brookfield Asset Management
Michael Corbat Chief Executive Officer Citigroup
Henry Kravis Co-Chairman and Co-Chief Executive Officer KKR
Ray Dalio Founder, Co-Chairman and Co-Chief Executive Officer Bridgewater Associates
Ismail Ali Abdulla
Dr. Matthew Agarwala
Economist, Bennett Institute for Public Policy
Managing Director and Chief Investment Officer
Schwab Asset Management
Elissar Farah Antonios
Cluster Head for MENA
Chief Technology Officer
Ares Management Corporation
President of One River Digital
One River Asset Management
Septimus ‘Bob’ Blake
National Commercial Bank (NCB)
Founder & Managing Partner
Lightspeed Venture Partners
Lord Davies of Abersoch CBE
Deputy Chief Executive and Chief Investment Officer
Russian Direct Investment Fund
Business journalist, contributor to Fortune Magazine
co-author of ‘Go Long - Why Long-Term Thinking Is Your Best Short-Term Strategy’
CEO and Chief Investment Officer
Soros Fund Management LLC
Dame Jayne-Anne Gadhia
Founder and Executive Chair
President and Chief Operating Officer
Managing Director, Deputy Chief Investment Officer of MSREI
Head of MSREI Americas, Morgan Stanley
David A. Hunt
President and CEO
CEO, Managing Partner, and Portfolio Manager
Wellington Management Company LLP
Co-Chief Investment Officer
Head of Factor and Core Equity Product Strategy
Lim Chow Kiat
State Enterprise Consultant
Former World Bank Staff
Co-Founder and CEO
Pure Harvest Smart Farms
Ottoniel Lobo Carvalho dos Santos
Angola Secretary of State
for Finance & Treasury
Chief Executive, Wealth and Personal Banking
QQQ Equity Product Strategies
Founder, Liberty Strategic Capital
77th United States Secretary of the Treasury
Waleed Al Mokarrab Al Muhairi
Deputy Group Chief Executive Officer
Mubadala Investment Company
Regional Director, Southern Africa & Nigeria
International Finance Corporation
SoftBank Group International
Head of ETFs and Indexed Strategies
B Capital Group
Co-CEO, Co-Chief Investment Officer and Chief Trading Officer