Witan’s Andrew Bell on why market recovery has further to go

TL;DR

Whitton Investment Trust CEO, Andrew Bell, is optimistic about the recovery of global markets in the second half of the year, citing widespread vaccinations, low interest rates, and fiscal stimulus. Inflation is a concern for bond investors, but the situation is more nuanced for equities. The trust now focuses more on global managers and has reduced its regional focus.

Transcript

hello today i have with me andrew bell chief executive officer of the whitten investment trust andrew thank you for joining me today thanks for thanks for having me on firstly andrew what is your outlook for the second half of the year for global markets do you think the market recovery since last april has further to go i think the short answer is... Read More

Key Insights

• ✋ The market recovery has been stop-and-start in the first half of 2021, but the widespread rollout of vaccinations and continued fiscal stimulus are likely to drive sustained economic growth.
• 😘 Inflation is a concern for bond investors due to low yields, but equities may benefit from governments and central banks' commitment to supporting company earnings.
• 👻 The Whitton Investment Trust has shifted to a global focus, allowing managers to pick the best stocks worldwide, while still retaining a specialist manager for the UK and a corner for emerging markets and sector funds.
• 🌍 The overall regional allocation of the trust includes a significant portion in the US, as well as notable weightings in the UK and Europe. The allocation is driven by the preferences of the managers and better investment opportunities.

Questions & Answers

Q: What is Andrew Bell's outlook for the second half of the year for global markets?

Andrew Bell is optimistic about the second half of the year for global markets, expecting sustained strong economic growth due to vaccinations, low interest rates, and fiscal stimulus. He believes there is further potential for market recovery.

Q: What are the risks to markets that investors should be concerned about?

While inflation is a concern for bond investors due to low yields, the situation is more nuanced for equities. Governments and central banks have committed to supporting the recovery and company earnings. Other risks include premature tightening, overstimulation, geopolitical tensions, and speculative valuation.

Q: Why has Whitton Investment Trust shifted to global managers and reduced its regional focus?

The trust's benchmark was simplified in 2019 to align with shareholders' preferences. It now has a single global index representation, allowing for greater flexibility in picking stocks by global managers. Regional specialists were no longer needed, except for a single UK specialist manager, and the trust also retains a specialist corner for emerging markets and sector funds.

Q: How does the overall regional allocation of Whitton Investment Trust look today?

The current regional allocation includes around 40% in the US, over 20% in the UK, around 17% in Europe, and the rest divided between emerging and Asian markets. The allocation is driven by the preferences of the managers, who tend to find better investment opportunities outside of the US.

Summary & Key Takeaways

• Andrew Bell is optimistic about the second half of the year for global markets, expecting sustained strong economic growth due to vaccinations, low interest rates, and fiscal stimulus.

• Inflation is a concern for bond investors, but the situation is more positive for equities as central banks and governments are committed to supporting company earnings.

• Whitton Investment Trust has shifted its focus to global managers, allowing for greater flexibility in picking stocks, and reduced its regional focus.