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Global Equities: Looking to a Brighter Future
With the US election now settled and a COVID-19 vaccine closer than ever, investors can look to a brighter future. And while large market moves could return given the current environment, volatility has often provided an opportunity to build long-term allocations to equities.
Where are we now?
We believe “Business as Usual” returned to equity markets in May when, thanks to support of central banks, financial operations returned to a stable footing, credit spreads narrowed and relatively normal trading volumes resumed. Since then, we have seen a relatively orderly market cognisant of fundamentals. Global equities have followed a broadly upward trajectory on vaccine optimism and better-than-expected economic and corporate earnings results.
Since the market lows, the MSCI ACWI has risen by 53%, giving a net rise of 4% year to date. Within that, global Technology has risen by 32% (NTR) against versus Energy, which has fallen 42%. Emerging markets are now back to the level where they started the year, with developed markets, driven by the US, performing better.1
1Source: Bloomberg Finance L.P., as of 16 October 2020.