Midyear 2021 EMEA Implementation Guide

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Keep it brief

  • What lies beyond the restart? This is the question at the front of investors’ minds as we move into the second half of the year. This juncture could represent a once-in-a-generation paradigm shift. The post-global financial crisis (GFC) playbook won’t work, in our view, as the historic monetary-fiscal collaboration to bridge the pandemic should lead to a higher inflation regime. This means we don’t expect another decade-long bull market in stocks and bonds. A new playbook is needed.
  • In our Midyear 2021 Implementation Guide, we look at how investors can position for H2 2021, with an outcome-orientated approach to the key investment themes laid out in the BlackRock Investment Institute’s Midyear 2021 Outlook.
  • Download the full Guide to discover how these market views could translate into implementation ideas across asset classes, geographies and sectors for alpha-seeking, index, alternative and cash funds.

Key Themes

  • We have seen the new nominal play out this year but believe it is only just getting started, given the shift in monetary policy frameworks to foster higher inflation. We are overweight equities, and like cyclical regions, such as Europe, as well as assets well-positioned for rising inflation.

  • China’s economy has come through the Covid-19 shock stronger than global peers, just as it did after the GFC – and it is prioritising the quality of growth over quantity. We favour above-benchmark strategic allocations to Chinese assets. Tactically, we like China bonds, and advocate selectivity in Asian and emerging markets.

  • There is no clear roadmap for the transition to a net-zero carbon emissions world. We know the starting point and desired endpoint – but we don’t think the journey will be smooth. We like assets well-positioned for the green transition, like tech, as well as sustainable equities and bonds.

This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or financial product or to adopt any investment strategy. The opinions expressed are as of July 2021 and may change as subsequent conditions vary.

Download the Midyear 2021 EMEA Implementation Guide
The restart of economic activity is real – and we remain pro-risk as it broadens. But what comes next? We see a range of possible macro outcomes. A new playbook is needed.
Front cover of the implementation guide