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JP Morgan AM: Inflation expectations not impacted by pandemic

The US asset manager expects inflation to be slightly below 2% for developed economies over the next 10-15 years, despite the unprecedented fiscal and monetary stimulus. ‘We expect a lot of volatility in the short term, with inflation possibly temporarily exceeding central bank targets. But in the medium term, we will return to the pre-pandemic structural trends,’ says Vincent Juvyns, macro strategist at JP Morgan AM. 

‘Investors still underestimate sustainable companies’

Shares of companies that are good for the world often manage to strengthen their competitive position at the expense of unsustainable companies. Their growth potential is often still underestimated by the market, according to Hendrik-Jan Boer, senior portfolio manager of Neuberger Berman’s Global Sustainable Equity strategy.

‘Growth in power semiconductors to continue for 10 more years'

Strong inflows into clean energy ETFs have pushed valuations of the various subsectors higher. To mitigate downside risks, a broader perspective on the sustainability theme is needed. Semiconductor manufacturers in particular are interesting, says Thiemo Lang, manager of the RobecoSAM Smart Energy Fund.

‘Dollar weakness double whammy for expensive US stocks’

Despite its recent slide, the US dollar is still overvalued. In time, the greenback could go much lower. This has positive implications for European, Japanese and EM equities, but is a bad prospect for Wall Street, according to Michael Devereux, multi-asset fund manager at Schroders.

‘Still a place for Treasuries in reflationary environment’

Investors should focus on cyclical equities, which benefit from a strong economic recovery. At the same time, they should use options and own some gold and Treasuries to protect their portfolio, according to Andrew Harmstone, head of Global Balanced Risk Control Strategy at Morgan Stanley.