Schroders Market Update
Every quarter, one of our asset managers from Schroders will provide an update into how the financial market is performing. Johanna Kyrklund - Group Chief Investment Officer and Global Head of Multi-Asset Investments, offers her insights on the different economic factors that influence the market conditions in the video below.
Johanna Kyrklund - Group Chief Investment Officer and Global Head of Multi-Asset Investments
Johanna Kyrklund is Group Chief Investment Officer and Global Head of Multi-Asset Investments at Schroders and joined in 2007. Responsible for investments on behalf of Multi-Asset clients globally and is the head portfolio manager of the Schroder Diversified Growth Strategy. Johanna leads the Multi-Asset Investments division, is a member of the Group Management Committee (GMC) and Chairs the Global Asset Allocation Committee.
Over the last year we have been procyclically positioned on the expectation that we could learn to live with covid and that economies would be open. Our overweight position in equities has worked well and at this point a lot of optimism is priced in, however we still see upside for corporate earnings and monetary policy is still supportive. We are in what we call the recovery phase of the cycle, which is typically benign for markets.
As we move into 2022 we expect inflation to rise on a medium term basis as labour markets tighten and this will lead to talk about central banks withdrawing liquidity and will eventually pose a speed limit to returns. For now we remain positive on markets however.
The key risks to our view; firstly any disappointment on corporate earnings would be troublesome for us as valuations are quite stretched. And secondly, if inflation rises more aggressively and forces central banks to tighten more quickly, that could also be a challenge to markets.
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