Delivering income outcomes in 2021

Delivering income outcomes in 2021

2020 was a trying year for investors, characterized by big swings in both stock and bond markets, new ways of working and communicating, and an unprecedented use of the word “unprecedented”. Turning the page on the calendar is a relief for many, yet the challenge of generating income in an environment of low and rangebound interest rates persists. We talked to Michael Fredericks, Portfolio Manager and Head of Income Investing for Multi-Asset Strategies & Solutions, to learn more his outlook and why he thinks a broader opportunity set is critical to delivering income outcomes in 2021. 

As we look back at a volatile 2020, what’s your outlook for 2021?

We think it is likely that 2020 “pulled forward” some of the potential returns of 2021, and that leads us to enter this year with more tempered expectations for stocks relative to last year. Nevertheless, while stock markets moved much higher and much faster than we had anticipated in 2020, we maintain a positive outlook for the global economy and the ability to generate future returns. There are three key things that make us optimistic about 2021:

  • First, despite early challenges in the initial rollouts, we believe Covid vaccines offer a clear light at the end of the tunnel. As the roll-out of Covid vaccines allows restrictions to be eased, healthy consumers and pent-up demand should contribute to a broader and deeper economic recovery in 2021.

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Michael Fredericks
Portfolio Manager and Head of Income Investing, Multi-Asset Strategies & Solutions