Equity markets globally have continued their recovery, buoyed by improving economic fundamentals, monetary and fiscal stimulus, ongoing low interest rate and inflation expectations and progress on COVID vaccinations.
Rapid distribution of the COVID vaccine has become increasingly urgent as the spread of the virus has accelerated in many parts of the world. We believe the environment for equities remains favorable against a backdrop of unprecedented fiscal and monetary stimulus and continued progress of vaccine deployment. Segments of the market most negatively impacted by COVID may experience some recovery, elsewhere, sustained earnings growth will be necessary to support valuations. Unemployment, output gaps, and central bank intervention are likely to contain inflation and interest rates in our view, limiting any sustained market rotation. Eventually, we expect market focus to turn to the shape of the economic recovery in 2022 and beyond. Current high equity valuations, especially in the US, are a key investor concern. But with a longterm investment horizon, we continue to find opportunities globally on a bottom-up basis that are compelling relative to their sustainable growth potential.
Over the long term, we see a continuation of secular themes that have shaped markets in recent years. An example is the acceleration and spread of technological innovation to all corners of the economy driving productivity growth. One enabler of this ongoing trend is the roll-out of 5G technology, which our analysts explore in this newsletter. We also discuss how we integrate ESG and sustainability into our company analysis with a discussion on the consumer sector. Finally, we close with a highlight of one of our holdings in our Emerging Markets portfolio.
We believe the best way to leverage these secular themes is to take an active, forward-looking approach to investing in companies with Quality, Sustainable Growth, and Reasonable Valuation. This approach has served the Fundamental Growth and Core (FGC) Equity team well over the long term, and more recently in 2020 when seven of our nine strategies outperformed their benchmarks. This is a testament to the depth and commitment of our team, a disciplined process and our long-term perspective.