Home or office? Following the Government’s so-called “Freedom day” lifting of most Covid restrictions in England on July 19th, corporate decisions about whether to work from home, return to office life or operate some form of hybrid arrangement have been prevalent amongst investment and wealth management professionals. An Ipsos survey for the World Economic Forum reported recently that among 12,500 employed people in 29 countries, a majority want flexible working to become the norm. And almost a third (30%) said they would consider looking for another job if they were forced to go back to the office full time. Interesting!
For us at Wealth DFM, our home office routine has worked very well so it is set to continue. Whatever your situation, The Argyll Club’s Beth Hampson article reflecting how the finance community is exiting lockdown is worth a read.
INFLATION – TRANSITORY OR A LONGER TERM PROBLEM?
From its latest report, we can see that the Monetary Policy Committee (MPC) believes that UK inflation is transitory. However, with June’s UK inflation figs rising to 2.5% from 2.1% – well in excess of the BoE’s 2% target – there is nervousness amongst market watchers. Such concerns have been exacerbated by warnings from the Bank’s recently departed chief economist, Andy Haldane. Haldane sounded the alarm bell by commenting during a speech that the risk of high inflation is “rising fast” and that in his view, UK inflation might reach 4% this year.
THE RISK TO FIXED INCOME
With UK base rates unchanged since March 2020, if Haldane’s scenario plays out, then the Bank may well need to increase interest rates more quickly than they are currently indicating. So what does this and the current tricky economic environment mean for bond investors? This edition of Wealth DFM sheds some light on the thinking of a number of experts in this sector on this important topic.
Our insightful interviews with both M&G Investments’ Andrew Eve and Invesco’s Paul Syms explore some of the main threats and opportunities facing credit investors. You can check out our summary versions of their thoughts in this magazine. On the following pages, there’s also a summary of our recent fixed income webinar in which experts drilled down into the detail of where they see risk and opportunities in bond markets. We’re grateful to all the participants for their involvement.
Matters of ESG continue to dominate investment decisions in terms of asset allocation and stock selection criteria across the globe. As you turn the pages of this magazine, you’ll discover that Aviva’s Giles Parkinson has an interesting argument. He shares his analysis with Wealth DFM that when it comes to ESG, positive externalities are an under-leveraged investment opportunity. You can read Parkinson’s views on page 13. Perhaps our most popular webinar to date was the ESG webinar held in June. Ably chaired by ESG specialist Julia Dreblow, you can read a summary of the key points of discussion on page 8. Again, we’re incredibly grateful to our Julia and our panel for sharing their expertise with us – as we are to all our expert contributors to Wealth DFM this month.