This session takes an indepth look at an issue being discussed around every investment table… inflation.
It looks at whether inflation risk exists and how different asset classes behave in inflation regimes. It asks whether inflation is entirely negative for portfolios and under which scenarios inflation is desirable and controllable. It questions whether there is a new relationship between growth and inflation, or whether historic patterns will prevail and, if so, which ones.
Click here to view Patrick’s presentation slides[vc_quotes layout=”accordion” quotes=”%5B%7B%22name%22%3A%22Patrick%20Zweifel%22%2C%22job_role%22%3A%22Chief%20economist%2C%20Pictet%20Asset%20Management%20(Switzerland)%22%2C%22content%22%3A%22With%20over%20two%20decades%20of%20experience%20at%20Pictet%2C%20Zweifel%20has%20been%20crucial%20in%20building%20the%20firm%E2%80%99s%20macroeconomic%20research%20capabilities.%20At%20Pictet%20Asset%20Management%2C%20he%20leads%20a%20team%20of%20four%20economists.%20Zweifel%20plays%20a%20key%20role%20producing%20research%20that%20helps%20shape%20the%20global%20investment%20strategy%20of%20the%20firm%20and%20which%20is%20fundamental%20to%20the%20investment%20decisions%20of%20fund%20managers.%20His%20analysis%20helps%20identify%20structural%20imbalances%20and%20business%20cycle%20turning%20points%20through%20the%20use%20of%20proprietary%20quantitative%20models%20and%20leading%20indicators%20on%20activity%20and%20inflation.%5Cn%5CnZweifel%E2%80%99s%20interest%20for%20emerging%20and%20Asian%20economies%20began%20following%20his%20work%20on%20International%20Economics%20for%20the%20World%20Bank%20and%20for%20the%20European%20Commission%20in%20the%20mid-1990s.%20He%20went%20on%20to%20teach%20econometrics%20and%20monetary%20theory%20at%20HEC%20Lausanne%20and%20HEC%20Gen%C3%A8ve%20until%20he%20joined%20Pictet%20Wealth%20Management%20in%201997%2C%20where%20once%20again%20he%20focused%20on%20emerging%20markets%20and%20currencies%20and%20rose%20to%20head%20of%20macro%20research.%20Zweifel%20then%20joined%20Pictet%20Asset%20Management%20as%20chief%20economist%20in%202009.%20He%20holds%20a%20PhD%20in%20Econometrics%20from%20the%20University%20of%20Lausanne.%22%2C%22image%22%3A%2244163%22%2C%22linkedin%22%3A%22https%3A%2F%2Fwww.linkedin.com%2Fin%2Fpatrick-zweifel-pam%2F%3ForiginalSubdomain%3Dch%22%7D%5D” title=”Speakers” el_class=””][vc_quotes layout=”accordion” quotes=”%5B%7B%22name%22%3A%22Amanda%20White%22%2C%22job_role%22%3A%22Director%20of%20institutional%20content%2C%20Conexus%20Financial%20(Australia)%22%2C%22content%22%3A%22White%20is%20responsible%20for%20the%20content%20across%20all%20Conexus%20Financial%E2%80%99s%20institutional%20media%20and%20events.%20She%20is%20responsible%20for%20directing%20the%20bi-annual%20Fiduciary%20Investors%20Symposium%20which%20challenges%20global%20investors%20on%20investment%20best%20practice%20and%20aims%20to%20place%20the%20responsibilities%20of%20investors%20in%20wider%20societal%2C%20and%20political%20contexts%2C%20as%20well%20as%20promote%20the%20long-term%20stability%20of%20markets%20and%20sustainable%20retirement%20incomes.%20She%20is%20the%20editor%20of%20conexust1f.flywheelstaging.com%2C%20the%20online%20news%20and%20analysis%20site%20for%20the%20world%E2%80%99s%20largest%20institutional%20investors.%20White%20has%20been%20an%20investment%20journalist%20for%20more%20than%2020%20years%20and%20has%20edited%20industry%20journals%20including%20Investment%20%26%20Technology%2C%20Investor%20Weekly%20and%20MasterFunds%20Quarterly.%20She%20was%20previously%20editorial%20director%20of%20InvestorInfo%20and%20has%20worked%20as%20a%20freelance%20journalist%20for%20the%20Australian%20Financial%20Review%2C%20CFO%2C%20Asset%20and%20Asia%20Asset%20Management.%20She%20has%20a%20Bachelor%20of%20Economics%20from%20Sydney%20University%20and%20a%20Master%20of%20Arts%20in%20Journalism%20from%20the%20University%20of%20Technology%2C%20Sydney.%20She%20was%20previously%20a%20columnist%20for%20the%20Canadian%20publication%2C%20Corporate%20Knights%2C%20which%20is%20distributed%20by%20the%20Globe%20and%20Mail%20and%20The%20Washington%20Post.%20White%20is%20currently%20a%20fellow%20in%20the%20Finance%20Leaders%20Fellowship%20at%20the%20Aspen%20Institute.%20The%20two-year%20program%20consists%20of%2022%20fellows%20and%20seeks%20to%20develop%20the%20next%20generation%20of%20responsible%2C%20community-spirited%20leaders%20in%20the%20global%20finance%20industry.%22%2C%22image%22%3A%2235225%22%2C%22linkedin%22%3A%22https%3A%2F%2Fwww.linkedin.com%2Fin%2Famanda-white-101a7515%2F%3ForiginalSubdomain%3Dau%22%7D%5D” title=”Moderator” el_class=””][vc_empty_space height=”10px”]
Inflation is set to rise further but the consequences are not all bad
It is important to distinguish between the two sources of inflation – supply side or demand side and how each feeds into different cycles.
Goods have a much lower share in most inflationary indices compared to services.
Uncertainty about consumption spending could cool inflation as could uncertainty about how much of this spending will be tilted to services.
Avoiding risk assets when growth is low; good inflation hedges include gold and inflation linked bonds.
Inflation can occur in a period of strong or low growth.
Emerging market equities and fixed income (hard and local currency) also offer investors opportunities, performing well in a climate of strong growth and rising inflation.
Investors should look at emerging markets in the context of their own growth, rather than comparing growth to developed markets.
The big difference between the vaccine rollouts and the scale of the stimulus measures across the world could result in a K-shaped global economic recovery, with much of the developed world booming but poorer countries continuing to struggle. However the
With hopes of a sharp rebound from the pandemic-induced recession quickly fading, policymakers should pause and take stock of what it will take to achieve a sustained recovery.
The technology already exists to make the due diligence process when selecting and monitoring managers more efficient, less arduous and highly productive.
Insights into private markets and venture may provide a real competitive edge for asset managers in demonstrating to investors an understanding of innovation and disruption and how this affects public market portfolios
Driven by active return, AP4 produced a stellar 9.6 per cent in 2020. But its chief executive, Niklas Ekvall remains cautious about the economic outlook and its impact on the portfolio, especially with regard to inflation.
USS's head of dynamic asset allocation Bruno Serfaty reflects on the inflation risk coming down the track, and suggests ways investors can build alternative liability matching portfolios beyond government bonds.
In this episode Amanda White talks with engagement specialist at Robeco, Peter van der Werf, about the importance of engagement; what good engagement looks like; and what financially material sustainability themes are important right now.
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