Fidelity

2020 was a year like no other. Covid-19 upended the global economy and led to the fastest bear market in history - before an unprecedented policy response drove a remarkable recovery in financial markets. So how should investors think about approaching 2021?

V, W or L? Market participants have assigned various letters to the potential shape of the economic recovery from Covid-19. Here, Romain Boscher, Global CIO for Equities, makes the case for a two-speed ‘K-shaped’ recovery. Against this backdrop, do valuations remain justified or are investors being ‘irrationally exuberant’?

Innovation has transformed the world and impacted everything from the way we travel, communicate and work. Although historically been viewed as an imitator, China is now at the forefront of the next wave of innovation. Our team outline three themes set to define China’s future dominance and where the investment opportunities lie.

Global CIOs Andrew McCaffery and Romain Boscher discuss how economies and companies are emerging from the pandemic and the implications for markets. While there are growing signs of optimism, markets remain highly sensitive to changes in sentiment. So what are the risks lying ahead?

Paras Anand, Chief Investment Officer, Asia Pacific, discusses how an increasing number of Chinese firms are shifting their focus away from a US listing in favour of domestic stock markets. He examines what’s driving this sea change and the implications for both Chinese companies and international investors.

China boasts the biggest consumer market in the world by population with large parts of it still under-penetrated. Wealth and technology are fuelling the sophistication of tastes and diversifying demand, often in unexpected ways. Paras Anand, Chief Investment Officer for Asia Pacific, talks with portfolio managers Hyomi Jie and Dale Nicholls to understand the trajectory of consumption in the country and what it means for markets.

The potential for widespread dividend cuts and cancellations was a dominant narrative over the first half of the year as lockdowns hit. But to what extent has rhetoric been matched by reality? We reveal some of the key payout patterns seen so far and outline why a focus on solid and sustainable dividend-payers looks set to continue to reward income-seeking investors in the future.

The assumption that shareholder returns should be maximised at any cost has been challenged by Covid-19, further embedding sustainable investing as a future destination for asset flows. Head of Equities, Asia Ned Salter and Lead Cross-Asset Strategist Wen-Wen Lindroth explore the drivers behind this transformation and their consequences for investors.

Covid-19 has already had a significant economic and social impact with extensive monetary and fiscal policies implemented to help mitigate the cost of the pandemic. This new world raises new challenges for income-seeking investors - we assess how and where investors might reach for yield.

We recently surveyed our team of analysts across the globe to get the on-the-ground view of what they’re hearing from companies. This month’s findings reveal that activity in most sectors and regions is expected to return to a stable level in under a year - but which regions and sectors show the most promise?

The Federal Reserve announced no major policy changes at the June FOMC meeting, as expected. Anna Stupnytska, Head of Global Macro and Investment Strategy dissects the key messages from the statement; whilst there was an overtone of “considerable risks” to the outlook for the US it’s not all bad news and there are early signs of stabilisation.

As the UK starts to emerge from lockdown, Fidelity UK Select Fund portfolio manager Aruna Karunathilake discusses how investors should approach the gradual reopening of the domestic economy. He outlines how easing back into normality will affect different sectors, why he’s feeling more positive on oil and how he’s positioning for Brexit.

A critical look at the factors underpinning recent market moves suggests that the current disconnect between the positivity of Wall Street and the sobering economic reality of Main Street will converge. We outlines three things investors should consider when positioning for this phase and why this could be good news for active investors.

If the trend towards sustainability was already in motion, then the Covid-19 crisis has sped it up. Global CIO Andrew McCaffery and our Global Macro Team discuss this dynamic and why companies will increasingly place social purpose above short-term profits as a means of ensuring their long-term sustainability.

Economic data is finally reflecting the impact of economic lockdowns, and markets have seen a meaningful risk rally. Given the extent of the economic slowdown and the unknown duration of the crisis, Eugene Philalithis, portfolio manager of our Multi Asset Income range explains why he still thinks it's too early to move to a risk-on posture. But it's not all negative news, he also dissects the far-reaching policy responses from governments and central banks and explains why dividend investors shouldn't lose hope.

As we move through the different phases of Covid-19, continuously evolving market dislocations will present challenges and opportunities. We discuss why investors should allocate capital in a way that is sensitive to recovery rates.

We recently surveyed our team of analysts across the globe to get the on-the-ground view of what they’re hearing from companies. This month’s findings reveal the rising dispersion across and within sectors, as well as the profound impact the Covid-19 crisis will have on how companies approach social issues. What would a move to stakeholder capitalism mean for company margins?

As the economic and social impact of Covid-19 plays out, new long-term trends will set the world on a unique course. Global CIO Andrew McCaffery and our Global Macro Team discuss what this new economic order could look like in terms of state intervention, fiscal activism and Asian leadership.