Opinion Piece: A View on the Markets by Marc O’Sullivan, With Profits Fund Manager, Wesleyan Assurance Society

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  • Author : Wesleyan
  • Date : 5 Nov 2021

Opinion Piece

A Volatile Time

The last 18 months have been a particularly unpredictable period for investment markets. However, vaccination progress at home and abroad has boosted consumer and corporate optimism, which has in turn propelled forward asset class and sectoral moves. These movements have been broadly favourable for Wesleyan’s With Profits Fund’s positioning and underlying performance in 2021.

The fundamental backdrop for economic performance, corporate earnings and financial markets in the developed world remains positive and the long-term effects of unprecedented monetary stimulus, fiscal support, robust consumer demand and elevated consumer savings have the ability to underpin economic growth for a number of years to come.

From a fiscal standpoint, international governments will be looking at ways to tackle the eye-watering debt/GDP ratios that have been accumulated since the start of the pandemic. Plans for increases in corporation taxes, the removal of tax holidays and changes to personal contributions are examples of the initial moves that policymakers are starting to make on this front.

To date (end of October 2021), equities have outperformed bonds, which has generally resulted in mixed asset funds producing low double-digit percentage returns. However, markets may start to shift their attention to the growing concerns about issues such as ‘peak growth’, ‘stagflation’ and rising cases of the Delta variant. As we all know, markets dislike uncertainty but we can be certain that it’s never too far away.

 

 

 

‘WESLEYAN’ is a trading name of the Wesleyan Group of companies.

 

Wesleyan Assurance Society is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Incorporated in England and Wales by Private Act of Parliament (No. ZC145). Registered Office: Colmore Circus, Birmingham B4 6AR. Telephone: 0345 351 2352. Fax: 0121 200 2971. Calls may be recorded to help us provide, monitor and improve our services to you.

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