Robeco's November Newsletter
Donald Trump's sweeping win of the presidential election caused equities to hit new highs... but bonds are pricing in the likely costs of tax cuts. In our monthly outlook this month we offer six takeaways from the COP16 biodiversity summit, examine the untapped growth available in emerging market credits, and discuss how local brands are underpinning consumer trends equities.
MAGA 2.0 – Markets Are Great Again
Markets have taken the sweeping victory of Donald Trump in their stride, though eyes will eventually focus on the financial cost of it, says portfolio manager Lauren Mariano.
- Equities reach record levels on promise of corporate tax cuts
- Bond yields rise due to likely increases in deficit and debt
- A projected ‘red sweep’ of Congress would consolidate Trump’s power
COP16: Laying the groundwork for action
The 16th International Conference of the Parties on biodiversity (COP16) took place during the past two weeks in Cali, Colombia. Representatives of 196 governments gathered to negotiate implementation and financing for global biodiversity targets.
- Nature finance was put at the core of the negotiations
- Building momentum in business approaches to biodiversity
- Good progress made in overcoming the data challenge
“Change is not driven by fear or regulation. It is driven by love’
Investing in more sustainable cities
Urbanization is one of the dominant economic trends of the 21st century and more investable than ever, as developers and asset owners adapt to a changing climate. The UN expects growth will come from the developing world with India, China and Nigeria in the next two decades, accounting for more than a third of the expected growth up to 2050.
- The UN estimates 68% of humanity will live in cities or megacities by 2050
- Climate change and sustainability-focused policy measures are impacting relative property valuations
- Investment in reconstruction and redevelopment will accelerate
Climate goals are unachievable without investing in urban infrastructure
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Emerging market credit: Untapped growth
After surviving an aggressive US rate-hiking cycle and China's economic downturn, emerging market credit has had a strong 2024. And the future looks promising.
- Competitive risk-adjusted returns and diversification
- Exposure to high-growth regions driving global economic and sustainable solutions
- Robeco has positioned strategies to capitalize on long-term growth
Consumer Trends: The rise of local brands
Local brands with more resilient supply chains and distinctive consumer propositions are disrupting multiple consumer segments.
- Global supply chain complexity favors local brands over global rivals
- Locally sourced products tend to resonate with local culture and values
- Changing consumer preferences are underpinning this trend
The smarter alternative to passive: Enhanced Indexing
Over the years, passive investing has gained popularity for its predictable returns and broad market exposure. These qualities have made passive strategies a staple in core allocations, offering investors low costs, broad market exposure, liquidity, diversification, and transparency.
During this webinar you will learn:
- The key reasons why investors consider enhanced indexing: the smarter alternative to passive investing
- How the concept of enhanced indexing addresses the challenges of passive investing
- How Robeco has successfully implemented this approach over the past decades