Bob Jenkins is Head of Research at Refinitiv Lipper.
What are your expectations for 2022?
The economic impacts will bear many of the traits we’ve seen since late 2020 – a perfect storm for increasing inflation and market leadership changing between growth and value/cyclicals as sentiment swings between lockdown fears and reopening cheers. At the end of the year, we will likely see overall economic growth, albeit at a slower pace than 2021, as the world overall has become more adept at factoring in and essentially living with Covid and the medical tools we have in place coupled with the learnings and focus of the medical and drug making communities mean the world should be able to handle further Covid curveballs, but they will cause havoc along the way nonetheless.
What trends are getting underway that people may not know about but will be important?
Carbon-neutral efforts can cause overall energy prices to rise in the near term. As energy producers retool to renewables, they need to invest and many of these renewable sources are expensive. Multiple forces will support higher energy prices, including supply chain issues, political posturing, demand for heating/cooling due to climate change, etc. Still, Covid will occasionally step in and disrupt and counteract these forces. As intermittent Covid concerns tick down energy consumption in the travel sector and business travel, on the whole, may never return to pre-Covid levels.
What industry trends have been prominent but are now fading (or will soon fade)?
Rather than current offerings, ESG funds will begin to splinter into more thematic offerings. We are seeing investors eschew the combined “ESG” mandates in favor of more targeted offerings that enable them to better assess stocks aligned with the funds objectives and avoiding “green” and “rainbow” washed securities (“rainbow” referring to the multicolored SDG principals – not necessarily to diversity). Direct Investing and model investing in general will continue to take share of wealth advisory strategies from traditional advisor platforms.