BNP Paribas 2021 Outlook: lockdowns not a “sustainable strategy”

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BNP Paribas 2021 Outlook: lockdowns not a “sustainable strategy”

BNP Paribas Asset Management’s investment outlook for 2021, titled, “Legacy of the Lockdowns.”

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Q3 2020 hedge fund letters, conferences and more

  • In our 2021 Investment Outlook, we seek to help investors navigate the next phases of the pandemic, the legacy of the lockdowns, and the ensuing economic recovery. We also consider how solutions to the climate crisis can be found at the same time as the world tackles the social and economic problems laid bare by the pandemic.
  • A Sustainable Recovery
    • We devote a significant section of our outlook to the opportunities that we believe the green economic transformation offers investors.
    • The current crisis is a reminder that we as investors must align investing with the realisation of sustainable long-term growth. Investing for the long run will be key because the typical 3-5 year investment cycle does not match the lifespan of financing the shift to green hydrogen or the innovation required to achieve e-mobility, develop natural capital and build green infrastructure.
  • Investment Themes For The Long Run
    • Our investment themes for 2021 have both a sustainable angle – energy transition and environmental sustainability – and a focus on long-running trends including healthcare improvements and disruption via new technology.
    • Our regional spotlight goes to China, the world’s fastest growing major economy, home to many innovative companies and a market that increasingly warrants a standalone allocation within multi-asset portfolios.
  • Macroeconomics And Markets
    • The takeaways from our macroeconomics and markets sections include:
      • The sharp global contraction in early 2020, and the likely second dip in the US and Europe in the fourth quarter, should nonetheless be followed by a rebound in growth in 2021.
      • COVID vaccines could be widely available by the second half of 2021. Until then, countries will need to ‘live with’ the virus as repeated full-scale lockdowns are not a sustainable strategy.
      • Accommodative monetary and fiscal conditions look set to remain in place to prevent marginal sections of the economy from collapsing. Policymakers will make every effort to forestall a deflationary slowdown from wrecking the global economy. Major central banks will continue to finance budget deficits, at least until GDP growth returns to trend. Their asset purchases should put a floor under risky assets, although the resulting high valuations may limit future gains.
      • Will the events of 2020 ultimately prove to be inflationary? Not, we believe, in the near future. The hunt for yield, be it in corporate credit or in emerging market debt, will remain a key focus for fixed income investors.
      • One of the key 2021 calls is whether value stocks can begin to reverse the underperformance of the last several years. The wide valuation gap versus growth stocks, the prospect of higher interest rates and an end to lockdowns suggest more upside is ahead.

ADW Capital’s 2020 letter: Long CDON, the future Amazon of the Nordics

Investing Greenhaven Road CapitalADW Capital Partners was up 119.2% for 2020, compared to a 13.77% gain for the S&P 500, an 11.17% increase for the Russell 2000, and an 8.62% return for the Russell 2000 Value Index. The fund reports an annualized return of 24.63% since its inception in 2005. Q4 2020 hedge fund letters, conferences and more Read More


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