To mark International Women’s Day some of Columbia Threadneedle Investments’ leading female fund managers discuss the prospects for their asset class as well as their thoughts on the wider backdrop for women in asset management and progress towards gender diversity.
Melda Mergen, Deputy Global Head of Equities at Columbia Threadneedle.
We are in the midst of a global, cyclical market rotation which is moving in lockstep with the pace of vaccinations. Companies with strong balance sheets, significant market share, and high moats will rebound quickly once pent-up consumer and business demand is released. We expect to see an expansion of market leaders over the next 18 months, as compared to the narrow group of winners we saw in 2020.
However, even as Covid-19 cases fall, the pandemic will continue to have a long-term impact on global equity markets, as it has accelerated several existing secular trends. We see innovation and product development increasing in areas such as e-commerce, digitalization, data sharing and healthcare.
Investors should remain prepared for periods of elevated volatility in the coming months. The path toward creating an infrastructure to distribute and administer vaccines globally will not be smooth, and the markets will react to bumps in the road. As active managers, we view periods of market volatility as opportune times to invest in our longer-term themes, by purchasing companies we already like at a discount, or selling those in which we have less conviction at price targets.
The labour force will play a significant role in the economic recovery. US unemployment hit record highs in 2020, and we expect it to remain elevated for some time in certain sectors of the economy. In the US, women were especially disadvantaged, as their labour force participation rate dropped to 57%, the lowest level since 1988*. We can’t let this become a long-term issue. Women need to be an integral part of the economic recovery. To leave them behind would be a detriment not only to markets, but to families and society as whole.