Four key investing trends that have emerged from COVID-19

When it comes to top investing trends, Lisa Gray, CEO of Victorian Funds Management Corporation, certainly knows her stuff. In a recent conversation with CEO magazineshe shared four interesting dynamics that, while not necessarily new, have been amplified by recent events.

Top Investment Trends 2021

  1. lower longer

    “Whether it’s fixed interest yields or different kinds of capital market conditions like inflation, there’s a whole global macro outlook of things that will be lower for a longer period of time.

    “What that means, as an investor, is that we have to adjust our performance to try to always meet clients’ long-term goals and their long-term investment performance.

    “Our clients are also facing challenges in their businesses due to COVID, so we need to work with them to adapt, and it’s about continuing to build that resilience and adapting our portfolios.”

  2. Data-driven decisions

    “Using data and analytics for faster and better decision-making will be the second investment trend. Global fund managers are doing this and will continue to build these capabilities, but COVID is putting a particular spotlight on this again. .

    “If you think about 2020, and now also in capital markets, the way governments have responded has been quite unconventional in terms of rapid policy response to support economies.

    “We are seeing extremely low, even negative interest rates, low inflation. These are all very different circumstances all happening at the same time, which means you have to digest information at very high speeds and from multiple sources, which investors generally haven’t needed to do in the past.

  3. A holistic approach

    “More and more investors are now looking at the entire portfolio to see how they view their asset allocation and how they build and allocate capital. For us too, it was clear that we needed to move from asset classes looking at the portfolio as a whole. This means that we plan to allocate our capital differently.

    “We’re not just looking at what’s happening in infrastructure, for example, but if something is happening, what does that mean for infrastructure stocks and how do all of these things fit together? Data and analytics are essential for this. But it’s also a different mindset when looking at things and their impact on the overall portfolio. So there is also a cultural basis to this.

  4. Investment management

    “As an investor or asset manager, we are stewards of capital and that ultimately means we have to invest it appropriately. That means we have had to become stewards of sustainability and business durable.

    “If you go back five or ten years, people were talking about environment, social and governance (ESG), but it was still very much on the fringes of investment decision-making. Whereas now investors such as ourselves behave as investment managers with ESG and other factors very much integrated into the way we make investment decisions. This has definitely been amplified by COVID.