FidelityConnects

Institutional Portfolio Manager Ilan Kolet is the newest member of the Global Asset Allocation team.  He works closely with Geoff Stein, David Wolf, and David Tulk.  On this episode of FidelityConnects, Ilan provides context and an outlook on the Canadian Economy and other countries, to help understand what it all means in terms of opportunities in the market.  Ilan comments on inflation, public debt levels in Canada, and emerging markets. He also shares his thoughts on the unemployment rate globally, how it affects the market, and what this all means for Canadian investors watching financial headlines closely. 

Recorded on March 26, 2021. 

Sector Strategist Denise Chisholm thinks we should expect more volatility. Corrections are normal and natural for the market, and we are likely to see them occur at an increasing pace, so it is important for investors to stick to their overall investment philosophy and use those corrections to add to holdings where they think market leadership may go over the next year. Given the rumblings about commodity inflation and whether it will be a problem for profit margins and earnings growth, Denise notes that based on historical analysis, it is more often than not the case that sales accelerate faster than input costs. She thinks the narrative that higher commodity prices will be a significant headwind for future margins may be overstated.

Recorded on March 25, 2021.

Fidelity Global Innovators® Class portfolio manager Mark Schmehl notes that the market is now broadening out with economies reopening and vaccine rollouts. There is a lot of money in consumer’s wallets and pent up demand. As the market shifts gears, Mark’s portfolios are also shifting gears and are looking very different than they did three and six months ago. Mark views innovation as change and looks for companies seeking to change the way they do business and adapt to changing environments. He currently owns more value than he has in years because he believes earnings growth could be great in the next two to three years. He also likes out of favour sectors that no one is talking about, and opts towards these because as they transform, he has potential to profit. Mark also has a lot of environmental exposure in his portfolios. He believes there is a huge fundamental environmental problem (with massive political will to make change happen) and that the demand for green infrastructure will be a huge market.

Recorded on March 24, 2021.

Today we welcome a special guest, Carlos Cardone, Senior Managing Director, Investor Economics. Carlos and host Kelly Roberts discuss trends that could shape the Canadian wealth management industry in 2021 and beyond. Carlos and his team produce research on the wealth management industry. They study past data, in addition to trends that could shape the industry in the future, and Carlos will unpack what we saw in 2020. Today’s discussion also includes findings on savings rates, young investor trends, and how the 2021 RRSP season set investing records.

Recorded on March 23, 2021.

Jurrien Timmer, Director of Global Macro, believes we are seeing a sizable rotation from U.S. large-cap growth stocks to virtually everything else. At one point FAANG stocks made up nearly a quarter of the market, and there were worries that a rotation away from these large-growth companies would take the market along with it. Instead, market leadership is broadening, and as other sectors rise, these stocks are coming back down to earth. Jurrien thinks we should feel optimistic about the current state of the virus. Despite some new waves in the U.S. and in places such as Italy and the U.K., vaccination rates are increasing, and cases are down. He believes we are well into an economic recovery now, and concerns have shifted away from the virus and toward how we will come out of the pandemic. 

Recorded on March 22, 2021.

Portfolio Manager Ayesha Akbar says this has been a fascinating time in the markets. Reflecting on the market activity of 2020 and heading into the second quarter of 2021, Ayesha gives her global outlook for the year.  She addresses many current themes including growth versus value, inflation, and the U.S. into emerging markets.  Ayesha manages the Fidelity Global Asset Allocation Fund. For her fund in particular, she looks at it from a global standpoint - investing in global equities, global bonds, and cash. She also looks at regional allocations and sector allocation as well.  She notes that we are in the most compressed economic cycle that she can remember, which gives rise to many opportunities.  

Recorded on March 19, 2021.

Fidelity Global Natural Resources Fund portfolio managers Joe Overdevest and Darren Lekkerkerker share how they are looking at global natural resources, one of the most hotly debated topics in 2021. Joe and Darren are bullish on copper, agriculture, lumber and chemicals. Copper is seeing a strong secular benefit from decarbonization, notes Darren, which will demand more supply for the market. Demand for oil was hurt through COVID-19, and although cyclical recovery is being felt across all commodities, including oil and gas, there is a secular headwind for these due to demand for renewables. Joe believes the demand for renewables is still in its infancy, but it is definitely on the rise from corporations, governments, etc., and technology will help to speed this up.

Recorded on March 18, 2021.

Every month, portfolio manager Jeff Moore brings his unique perspectives on global fixed income markets, using a multi-sector lens. Reflation and reopening are the big topics right now, and Jeff’s view is that we will reopen gradually over the next few months. The market is in the right place for now, and has done a good job of pricing in reflation, fiscal stimulus, a blue wave in the U.S., etc. Investors should think about inflation being around 3%; by December, Jeff thinks it will be back around 1% – a “snapback and then a rollback.” Jeff’s biggest concern about coronavirus variants is that we have added a lot of debt as a result of a series of shutdowns and recoveries. For some countries, this debt will be a big issue. That said, it looks like the U.S. will snap out of it a little faster than the rest, due to massive stimulus – but while the U.S. will likely have the fastest recovery, it will also have the highest interest rates.

Recorded on March 17, 2021.

Director of Global Macro Jurrien Timmer, reflecting on the past year since COVID-19 lockdowns began, notes that the markets have stabilized after an unstable bottom. Market leadership has expanded, and now the economy looks as though it could run hot in the second half of the year, especially with U.S. vaccinations rolling out. The COVID-19 curve in the U.S. is improving, and Jurrien believes that this, combined with additional stimulus, is good news for the economy. Jurrien thinks that bond yields are pushing higher and that a transition from growth to value is underway. Growth stocks have been running the show since 2008 (especially U.S. large-cap growth); these are longer-duration stocks that are very sensitive to changes in interest rates. He believes that small caps, value, commodities and rising yields should now be the focus of the market.

Recorded on March 15, 2021.

Portfolio manager Aneta Wynimko discusses the new global consumer landscape, where consumer spending is taking place and how that might change following the vaccine rollout. As a result of lockdowns, Aneta believes, people will want to get out and socialize as soon as they can, and the businesses that allow consumers to enjoy experiences, such as restaurants, could thrive because of this. She is increasing her exposure to companies she thinks will benefit from increased consumer consumption once lockdowns have been lifted. There is currently $1.4 trillion in excess savings in the U.S., due to limited spending opportunities, notes Aneta. Rather than reacting to inflation concerns, Aneta is holding tight right now, and focusing on companies with pricing power and efficiency as things to return to normal. She thinks that a little bit of inflation is good for the market; the problems occur when we get into high inflation.

Recorded on March 16, 2021.