Liontrust comments: prospects for 2021 are bright

Storm Uru, Global Equity Team for Liontrust

Many of us are in a hurry to turn the page on 2020 and the prospects for 2021 are bright – a vaccine, the ability to see friends and family again, maybe even a little travel. But for some companies who have been riding the wave of technological change, have leadership positions and have focused on innovation, 2020 presented a once-in-a-lifetime position to outcompete undercapitalised, unprepared rivals.

Even before this year, the past decade has witnessed a doubling in the rate of innovation – 300,000 US patents per year versus 150,000 per year in 2000s. Look no further for evidence of what we have witnessed this year – a complete bifurcation between those that have innovated and those that have not – than comparing Amazon with H&M.

This is not a new trend, as technology adoption speeds have been accelerating for decades. Those companies which have harnessed technological change to drive lower prices or higher quality products for customers are well positioned to drive shareholder returns over the next five years.

2020 was unlike any other year, and those companies that benefited from the demand-side shift now have an unprecedented opportunity to convert this leadership position and become the next Alphabet or Microsoft. These are companies which are part of our everyday life and provide services we rely on.

Innovation is one of the most important drivers of shareholder wealth creation and this year it has become the most important, offering companies that were prepared an opportunity like no other.

Featured News

This Week’s Most Read

  • Price of scarcity: Central banks are driving large valuation premiums on assets with limited supply

    By Charles-Henry Monchau, CIO at Syz Bank It is important to understand the concept of scarcity to better understand its mechanics and its impact on markets. Scarcity refers to the

  • Why now is the right time to invest in Japan

    By Masakazu Takeda, lead portfolio manager of the Japan Focus All Cap strategy at SPARX Asset Management The issues that have plagued Japan over the years are now at the doorstep of

  • Why high yield bonds could be the next ESG frontier

    By Lila Fekih & Mark Remington, Co-Portfolio Managers of the New Capital Sustainable World High-Yield Bond Fund at EFG Asset Management  Equities have garnered the most attention in the ESG

  • Fundsmith hints at bumpy ride

    Terry Smith’s annual letter to shareholders reports a slight underperformance of the MSCI World Index over one year Despite the value rally, quality stocks outperformed in 2021 Smith says unexpectedly

  • Brooks Macdonald Funds under Management hit £17.3bn

    Brooks Macdonald today publishes an update on its Funds under Management (“FUM”) for its second quarter ended 31 December 2021, together with a Trading Update for the half year. FUM

  • Ninety One appoints Juliana Hansveden

    Hansveden to develop emerging markets sustainable equity capability Ninety One has today announced the appointment of Juliana Hansveden, CFA, as Portfolio Manager, Emerging Markets Sustainable Equity. In this newly created

  • Man GLG’s Atherton: Governance revolution in Japan like the UK in the 80s and 90s

    The ESG-driven corporate governance revolution in Japan is creating investment opportunities similar to those in the UK in the 1980s and 1990s, says Jeff Atherton, manager of the Man GLG

  • BlackRock launches two new active Climate Action funds

    The BGF Climate Action Multi-Asset Fund and the BGF Climate Action Equity Fund leverage BlackRock’s deep expertise in active sustainable investing with the objective of generating positive environmental impact.  As

  • US December CPI inflation rises 7% from a year ago

    David Goebel, Investment Strategist at Tilney Smith & Williamson, the wealth management and professional services group, comments on the latest US CPI inflation data: US December headline CPI inflation rose

Wealth DFM