Global Equities

Structural themes underlie opportunities in the year ahead. Our Quality Growth portfolio managers expect stock performance will be more closely tied to earnings growth, the US consumer will remain healthy, select emerging markets are poised for continued growth, and certain Chinese stocks will benefit from a reopening.

Like the end of a long evening of revelry, the decline in the fortunes of momentum growth and value companies leaves the Quality Growth investors, in our opinion – still standing. Companies with pricing power, low debt, and consistent earnings may be the slow but steady winners in the race to beat the market.

As pressure has been building on Chinese technology stocks given growing regulatory threats, some of the key players in the Chinese internet sector are shifting to a more prudent strategy, pulling back to focus closer on the core business rather than investing in new growth areas.

Market sentiment reflects growth that will continue at past levels, yet economies and businesses globally are facing stiff headwinds – high government debt, rising inflation, and supply chain bottlenecks. As markets shrug off risks, expect volatility and a divergence in company performance in 2022.

European equities have lagged the US for more than a decade. But there are reasons to believe that Europe can outperform again: The benchmark is now more exposed to higher growth companies, valuations are attractive, macro reforms have mitigated risks and Europe is leading the way in ESG.

After a tumultuous 2020, what will the new economic cycle hold for Global Equities? What is the current pulse of the market and where do our specialists see the greatest alpha opportunities in this asset class?

Investors could try their luck like the NY State Lotto ad “Hey, You Never Know” suggests. But successful investing over time is not a game of luck. It requires discipline and skill. “Lottery Ticket” stocks – fast growing yet unprofitable and highly valued companies – and other signs of market exuberance amid rising economic uncertainty warrant attention.

In our new audio series, Vontobel Quality Growth Portfolio Managers offer insights on how to navigate volatility. You can listen to our experts’ views on the risks in equity markets today and how they identify companies that are on the right side of long-term structural trends.

Matthew Benkendorf, CIO of the Quality Growth Boutique, reviews portfolio performance, shares his outlook and discusses why he believes a bottom-up approach is the best way to navigate the difficult investing landscape ahead.

Investing with conviction can be a critical part of the foundation that helps ensure sustainable gains in a global equity portfolio. But how can an investor build this kind of confidence in a company, under current market conditions, when so much uncertainty poses a risk to potential returns?

With markets recognizing heightened risks, investors can expect volatility ahead. While it is impossible to time the market, an active manager with a demonstrated track record should be positioned to add value during market declines. Our Quality Growth approach is mindful of risks through the cycle, regardless of market despair or exuberance.

In the age of digital disruption, it’s no surprise that physical stores have suffered, receiving terrible press over the past few years. But for those of us looking beyond the headlines, we have found that brick and mortar franchises continue to prosper in select segments of the retail industry.