By Annabel Brodie-Smith
I hope you enjoyed the summer. Mine took an unexpected turn with my Mother breaking her hip in early July. The good news is she’s much better and should be coming home from hospital in the next couple of weeks. It was a staycation summer for us but the heatwave luckily came when I was on holiday so lots of swimming in the river, punting and a visit to Blenheim Palace. And the good news is the boys are back in school!
This month we are heading stateside to embrace America as we look at the impact of the November 3rd presidential election. Having lived in the US for two years during my MA, I feel warmly towards the States where anyone with a good idea can work hard and make it happen. We consider whether tech stocks are overvalued as markets head lower after the recent hights or will they continue to lead the recovery Do watch my webinar where I discuss these questions with Fran Radano, in Philadelphia, Manager of North American Income and Global managers, Paul Niven who manages the oldest Investment company, F&C Investment Trust and Zehrid Osmani, Manager of Martin Currie Global Portfolio. You can also read our American-as-apple-pie article looking at how the US will fare in the future. There are some interesting thoughts with Fran Radano commenting on the election: “The betting markets, which have proven to be much more accurate than polls, continue to forecast a victory for Democratic Party candidate, Joe Biden, albeit with narrowing odds.” As to the future of technology, the Manager of JPMorgan American Investment Trust, Jonathan Simon, believes: “Tech has rallied in the US because it is at the heart of everything we do, and this has only been increased by Covid-19.” He goes onto explain that total online retail sales in the US have expanded from just 1% in 2000 to 11% in 2019.
Investment company managers discuss their outlook for the US ahead of the upcoming election.
I only need to look at the number of cardboard delivery boxes going in my recycling (which my husband moans about as apparently he always ends up putting them in the garage) to know this online shopping trend is alive and well here too. The new normal continues this week with Covid and the six person rule in England dominating the headlines. Jean Roche, Co-Manager of the Schroder UK Mid Cap Fund, talks about this in her article on the ‘homebody’ trend - increased shopping, studying, working and entertainment at home during lockdown in the UK. She is making sure she is getting plenty of exposure to underappreciated UK -based technology or tech-enabled companies. Examples include refurbishment - she owns Dunelm, gaming - she owns Games Workshop, and my personal favourite trend although we haven't participated yet - increased pet ownership, which Jean accesses through Pets at Home. Finally, our investment expert Ian Cowie looks at the benefits of investing internationally and focuses on the US ahead of the election. He has of course benefitted from the strong performance of Worldwide Healthcare and Polar Capital Technology, two investment companies he has invested in for more than a decade, which have a 63% and 69% weighting to the US. Despite some predictions that the US bull market will come to an end with the election of Joe Biden, Ian reminds us that the same was said when Trump became president. Ian sensibly takes the view: “Here and now, I continue to believe share prices are more likely to be driven up or down by supply and demand - such as what folk do, rather than what they say - or economic facts rather than political fiction.”
Wishing you a lovely September.
Annabel Brodie-Smith Communications Director, AIC
