Around the world in 80 seconds

Karim Chedid
Karim Chedid, CAIA
EMEA ETF Investment & Product Strategy

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  • Hi, welcome to Around the World in 80 Seconds, and our last update of 2020.

    I want to focus on two things today: the first, we polled a thousand of our clients in Europe as they were registering for the 2021 Outlook webinar we held last week, and the top billing in a question on asset allocation preferences for next year came for emerging markets assets.

    I can think of 3 reasons why that is: the moderate dollar view that many have, more central bank stimulus expected, as we saw with the ECB (European Central Bank) top-up last week, and fiscal stimulus - and the fiscal piece is particularly important if it has positive spill-over to EM (emerging markets). And then lastly, the performance of EM Asia, and specifically China, both in terms of asset class resilience, as well as how they managed the pandemic, which will be a key takeaway that investors will walk away with as they look back at 2020.

    But, before we get to 2021, Brexit is remaining in the headlines firmly, straight up to the end of the transition period on December 31. And here, we looked at UK flows— what’s clear is that some investors have started to dip their toes back into UK equities in November, which was the most positive month of the year for UK flows, especially towards large caps like FTSE100, which is tilted towards cyclicals— something to think of, if the recovery continues in 2021. But we also looked at UK portfolios, and what’s clear here is that there has remained a strong home bias from domestic investors towards their UK equities and gilts throughout 2020.

    All that’s left is to wish you a good year-end. Thank you for joining.

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