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Outlook
June 3, 2021
4 mins

Letter from David Bailin

June 3, 2021
4 mins
David Bailin
GLOBAL HEAD OF INVESTMENTS & CHIEF INVESTMENT OFFICER

I am delighted to share with you Mid-Year Outlook 2021, which presents our expectations for the global economy and markets for the rest of 2021 and beyond.

The past 15 months have been one of the most challenging periods for the world in living memory. Now, though, the end of the pandemic is coming into view. Thanks to vaccine rollouts and unprecedented stimulus, economies the world over are heading for a full reopening. Among consumers, we see widespread pent-up demand for many activities such as seeing friends and family, dining out, and taking vacations. Our expectation is for a robust global economic expansion that continues for several years.

New portfolios for a new economy

As we travel to the post-COVID world, we therefore recommend ongoing portfolio exposures to the economic recovery and to sustained beneficiaries of the pandemic’s impact on how we live and work. We have identified many opportunities for potentially enhancing investment portfolios.

For example, we have shifted our asset allocation away from areas that have already rebounded most strongly and towards those that have further to go, including healthcare and global real estate. We also identify regions and national markets that continue to price in excessive bad news, including the UK and Brazil. These have significant recovery potential.

As you will read, we are thinking deeply about the world beyond COVID. Certain structural shifts in the economy are likely to endure well after the virus is defeated. Among them are increasing digitization, accelerated innovation in healthcare, and the transition to renewable energy. These advances are likely to have far-reaching impacts, such as upon how we use real estate. We also believe US-China strategic competition has entered a new phase, involving greater state capitalism on both sides.

All these and other developments require changes to your portfolio. Mid-Year Outlook 2021 sets out the actions we think you should take to gain exposure to these shifts.

I would also like to invite you to join us at our forthcoming series of Mid-Year Outlook 2021 livestream events. At these sessions, you can hear directly from our CIO teams and other wealth professionals and put your questions to us directly.

Your relationship team stands ready to work with you to customize our ideas for your needs. As a first step, please ask them for your personalized Outlook Watchlist report, which examines your portfolio in light of our recommendations.

Thank you for the trust and confidence you place in the Private Bank.

Regards,

David Bailin

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