Your Q2 2021 outlook

There are lots of decisions we have to make when it comes to investing your money, from understanding how much risk you want to take and working out what investments to put your money into, to designing strategies so we can get you the best possible returns. The economic cycle and market conditions are really important when it comes to making these decisions, because they can affect how your investments perform, so we always play close attention to what’s going on.

To keep you updated, each quarter, we speak to Trevor Greetham, Royal London’s Head of Multi Asset Investments, to find out what’s been going on in the global economy and how this could have an impact on your money.

TREVOR GREETHAM: Hello my name’s Trevor Greetham, Head of Multi Asset for Royal London Asset Management, and I’ll be speaking to you for the next few minutes about what’s going on in the world economy and financial markets and the outlook that we see.

The big message of the last few months has been light at the end of the tunnel. We have a range of very effective Covid-19 vaccines that are being rolled out very rapidly in the UK, the US and around the world. And that means that financial markets have been generally pretty positive. If anything, we are seeing the signs of interest rate expectations edging higher and that’s causing some turbulence in the more highly valued parts of the market, like technology. But the losers of 2020, the areas of the world economy that were hit hardest, are starting to see an improving picture. And that means we’re seeing commodity prices rise, we’re seeing the less expensive companies in the industrial sectors, or leisure and retail, or financial sectors doing better. And we’re seeing parts of the world, like the European markets and the UK market, and also Japan, doing better, rather than just US big technology stocks doing all the running.

We see a pretty good outlook here. We think the world economy will recover really very strongly into 2022 as social distancing starts to be wound back, and that does mean you’re going to see a big increase in corporate earnings and cashflow. So generally, we think financial markets will be doing pretty well. There will be some concerns about rising interest rates in some quarters, but on balance we think that that will not cause too much trouble for a well-diversified portfolio.

So [a] more upbeat message at the moment, a positive outlook for the world economy, some build-up of inflation pressures but interest rates we think will stay pretty low. And while there could be some rotation between different types of company, we think a broadly diversified portfolio should be making good progress over the next few months.

This video was recorded in March 2021 during the coronavirus outbreak. This market outlook is the view and opinion of the investment expert and should not be taken as investment advice. Please remember that the value of investments can fall as well as rise, and you could get back less than you pay in.

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