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
Over the past year, the COVID-19 pandemic has accelerated the shift to a new paradigm for economies and markets, characterized by near-zero interest rates, coordinated monetary and fiscal policy (Monetary Policy 3/MP3), and heightened internal and external conflict.
Head of Global Infrastructure, Ben Morton shares why we see the proposed spending package and tax changes as a clear positive for listed infrastructure.
In 2020, there are 4 very powerful and visible phenomena, the convergence of which is likely to bring tremendous change and disruption, much of which will be at the expense of incumbent business models and with significant investment implications.
The rapidly increasing administration of COVID-19 vaccines, coupled with the imminent flood of fiscal stimulus from the American Rescue Plan Act, has generated widespread expectations that the US economy will boom in the second half of 2021.
Climate change is one of the defining issues of our age. Its physical manifestations are negatively affecting ecosystems, human health and economic infrastructure. The transition to a zero-carbon economy presents significant challenges, but also opportunities for investors.
Leave a Comment
You must be logged in to post a comment.
Login