The Great Influence of Disinflation and an Optimistic Soft Landing Narratives Over US Assets

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soft landing, hard landing
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Mergers and acquisitions activity was materially stronger in the second quarter, increasing 33% compared to the first quarter of 2023, and it marked the strongest quarter for new deal activity in the last 12 months. Despite this pickup in activity, dealmaking in the first half totaled $1.3 trillion and is still 37% lower than the first half of 2022. The Healthcare sector has been the most fertile ground for dealmaking in 2023, with deals totaling $188 billion, an increase of 43% compared to 2022 levels and the sector accounted for 14% of all M&A. Energy & Power and Technology each accounted for 14% of dealmaking in the first half as well. Private Equity accounted for 21% of total M&A in the first half, down from 26% in 2022, as total volume reached $279 billion, a decline of 49% compared to the first half of 2022.

Strategy performance in June was bolstered by closed deals including Qualtrics (XM-Nasdaq), Prometheus Biosciences (RXDX-Nasdaq), U.S. Express Enterprises (USX-NYSE), and BELLUS Health (BLU-Nasdaq), as well as spreads that generally firmed following a volatile May. The strategy also benefitted from a bidding war that emerged for CIRCOR International (CIR-$56.45-NYSE), a manufacturer of flow control products

U.S. stocks were higher for the month as encouraging indications of disinflation and optimistic soft landing narratives took hold. Recent economic data has revealed a greater prevalence of disinflationary trends, exemplified by May’s Consumer Price Index (CPI) exhibiting a softer-than-anticipated figure. In fact, the headline CPI recorded its lowest annual increase in over two years. Throughout this month, mega-cap tech stocks displayed notable strength, propelled by sustained optimism surrounding artificial intelligence (AI), despite a few sell-side downgrades and apprehensions that the market may have already overbought AI-related tech names.

Earlier in the month, after tense negotiations, Congress approved a deal to raise the government’s borrowing limit that helped prevent a potential economic catastrophe. This deal suspends the U.S.’s debt limit until January 2025, allowing the federal government to keep borrowing money so it can pay its bills on time.

On June 14, the Federal Reserve decided to not raise rates, leaving the targeted federal funds rate at 5.00-5.25%. This pause in June signifies a significant milestone as it represents the first policy meeting in which the Federal Open Market Committee (FOMC) refrained from raising interest rates since it began its monetary policy tightening cycle in March 2022. Fed Chair Jerome Powell lauded the resilience of U.S. growth and the job market, emphasizing their robust performance that surpassed initial expectations amidst the backdrop of an assertive monetary policy tightening over the past year. The next FOMC meeting is July 26-27.

Mega-cap tech stocks continued to be the prime beneficiaries of the recent positive momentum regarding artificial intelligence, helping the S&P 500 (+6.5%) and Nasdaq (+6.6%) extend their streak of monthly gains to four months, while the small-cap Russell 2000 Value (+7.9%) had its best month since January. We see abundant opportunities in small to mid-cap stocks, given the compelling valuation of the Russell 2000 Value, which currently trades at only 10-12x earnings. This stands in stark contrast to the broader market, which hovers closer to 20x earnings, representing one of the biggest deltas we have ever witnessed.

In June the convertible market moved sharply higher as investors were willing to take on risk again. The rally was broad in scope across the market with equity alternative convertibles contributing the most to index performance.  We have highlighted the value in total return and fixed income equivalent convertibles over the last few quarters, and these holdings performed well as equities moved higher. We still see opportunity in a balanced convertible portfolio. While the market took a risk-on stance in June there is still a wall of worry it must climb to return to previous highs and beyond. Convertibles offer a risk adjusted way to participate in this market. Investors can own equity sensitive convertibles in companies where they have conviction while benefiting from the asymmetrical profile of total return and fixed income equivalent convertibles. Yields to maturity are no longer as excessive as they once were, but many are still quite attractive in companies that are appropriately managing their balance sheets and cash flows.  These are often convertibles within a few years of maturity that we expect to accrete to par over that time. These convertibles should have limited downside from here and we expect them to outperform equities in a flat, down, or volatile market.

New convertible issuance this month came at a reasonable pace. We continue to be on track for a better year of issuance than we saw in 2022, but below the peak years of 2020 and 2021. What we did see this month was a healthy mix of new and returning issuers to our market. New issuance has generally been attractive with higher coupons, lower premiums and more asymmetrical returns than are available in the secondary market. We have continued to see companies buying back convertibles in a transaction that is accretive to earnings and positive for the credit. We expect this bid to continue to benefit some positions in the fund.

 

Opinion article by Michael Gabelli, Managing Director and President of Gabelli & Partners. 

Foreign Managers in China Tap into Strengths

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Photo courtesyIsabel Campillo, Carmen Garcia & Cristina Rubio, Capital Strategies team

To compete effectively in China’s mutual fund market, foreign managers in China will need to demonstrate the advantages of their investment methods and find their niche areas.

China’s RMB26 trillion (US$3.6 trillion) mutual fund market continues to attract global asset managers, and eight wholly owned foreign fund firms have been set up in the market to date.

Backed by professional research teams, as well as extensive global investment experience, foreign managers can provide innovative solutions to meet the diverse needs of investors.

Foreign managers can use these strengths in areas that are relatively new to China, such as pension funds, index funds, sustainability-themed funds, and Qualified Domestic Institutional Investor (QDII) funds. They can also rely on their expertise to provide investors with more personalized and scientific programs, such as quantitative strategies and robo-advisor platforms.

Foreign fund managers with established global brands have no problem attracting investors’ attention. However, no matter how strong their financials, investment philosophies, and risk control systems are, global managers in China still need to provide excellent performance and service.

Many local fund managers have started to refine their investment processes in recent years, and they are increasingly focused on the stability of investment processes and portfolio risk management.

Most foreign fund managers have entered the Chinese market through joint ventures, with only a few starting their activities in the form of solely foreign-owned or foreign-controlled businesses in the past three years. This means they tend to have a smaller domestic customer base and relatively weak fund distribution channels compared to local companies. Foreign managers that are lagging in traditional distribution partnerships with banks may find it expedient to partner with other distributors. Cerulli believes that enhancing cooperation with top securities firms focused on wealth management and online platforms will bring about opportunities for growth.

Foreign fund managers also face fierce competition from local firms in attracting and retaining talent. Still, they have managed to recruit star managers who are familiar with the domestic capital market and possess local investment experience.

Local talent who choose to join foreign managers tend to do so for culture reasons, as the work pressure is generally less intense in foreign firms, and they provide more attractive benefits and better work-life balance.

“The entry of global fund houses has intensified competition in China’s asset management industry, but offers opportunities for the entire industry to develop,” said Joanne Peng, research analyst with Cerulli Associates. “For foreign mutual fund managers to succeed in the market, they will have to work on their ability to achieve stable returns and control the risks of their products.”

New Data Shows Shifts in Texas Real Estate Markets

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The median price of homes sold in Texas in the second quarter decreased 3.1% compared to one year ago, according to the 2023-Q2 Quarterly Housing report released today by Texas Realtors. During the same time frame, the number of closed sales also decreased, while the number of homes available for sale increased.

“There’s a saying that all real estate is local, and the second quarter this year showed how true that is,” said Marcus Phipps, 2023 Chairman of the Texas Realtors. “While the statewide median price eased down, median prices are actually up in about half of Texas markets. Despite that variation, the average number of days that homes spent on the market was up in every metro area, and the number of homes available increased in nearly every metro as well.”

The median sales price of Texas homes for Q2 2023 decreased to $345,000 from $357,388 in the same period last year. Texas homes spent an average of 87 days on the market before closing in the second quarter, which is 20 days longer than a year ago.

The price distribution of properties sold in the second quarter shows a slight decrease in high-end homes as a percentage of total sales. Homes that sold for at least $750,000 made up nearly 10% of homes sold in the second quarter last year, while that price range accounted for 8.7% of sales in Q2 this year. Half of properties sold in the second quarter this year were in the $200,000 to $399,999 price range, up from 45.8% of all sales a year ago.

Months of inventory—or how long it would take to sell all homes on the market at the current pace of sales—increased from 2 to 3.2 months from the same period last year. While the increased inventory is a welcome trend for buyers, it still indicates a tight supply of homes. Researchers at the Texas Real Estate Research Center say that a market balanced between supply and demand is in the range of 6 to 6.5 months of inventory.

“General trends provide an indication of the overall market, but buyers and sellers will want to work with a Realtor who really knows the specific area,” said Chairman Phipps. “Not only can small changes in location make a difference, but each property is different. A Realtor has the knowledge to help buyers and sellers sort through all the variables to achieve the best results.”

Miami-Dade Innovation Authority Launches First Public Challenge, Seeks Novel, Sustainable Uses for Sargassum

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The Miami-Dade Innovation Authority, Inc. (“MDIA”), a nonprofit that works to strengthen the relationship between local government and technology companies as a way to identify and scale innovative solutions that improve the quality of life for Miami-Dade County residents, has announced its first-ever public innovation challenge.

Kicking off Wednesday, July 12, 2023, the open call seeks novel and sustainable uses to beneficially repurpose sargassum, a type of seaweed known for forming large floating mats that wash up on beaches across the world during the warm summer months. As part of this challenge, the MDIA will select at least three (3) early-to-growth stage technology start-ups and award each $100,000 to fund the further research and development around sustainable solutions that process sargassum in an environmentally responsible manner and prioritize the health and safety of end users.

In addition to the six-figure investments, selected companies will be shortlisted to participate in a product testing program directly with Miami-Dade County and local institutions beginning next spring, during the onset of the 2024 sargassum seaweed season.

The MDIA will oversee each testing process and will work closely with the portfolio companies to publish a report on the outcomes and results, as well as activate its network of partners and resources to publicize the report and key findings.

“The MDIA is dedicated to cultivating a thriving innovation ecosystem in Miami-Dade County,” said Leigh-Ann A. Buchanan, President & CEO of MDIA. “We are thrilled to officially launch the first in a series of public innovation challenges that will provide entrepreneurs access to critical funding necessary to test and validate their ideas in a real-word environment, foster collaboration, and drive economic prosperity by harnessing the power of technology to solve the critical issues impacting our community.”

Sargassum plays an important role in marine ecosystems, providing shelter and food for both small marine creatures and larger fish in the open ocean, and depositing prey-rich wrack onshore for shorebirds. Unfortunately, periodic blooms of the macroalgae are increasing in frequency and size, causing large mats to accumulate along Florida’s Atlantic coast, releasing hydrogen sulfide gas that can cause breathing difficulties when decomposed. It also irritates the eyes, nose and throat, causes a burning sensation, and expels a malodorous odor; ultimately impacting Miami-Dade’s local fishing and tourism industries, and necessitating expensive collection, removal and clean up.

“Miami-Dade County sits uniquely at the intersection of environment and innovation. We’ve spent over $4.2 million on sargassum cleanup in 2022 alone. And while this naturally occurring event can disrupt our beautiful beaches, we are committed to finding environmentally friendly solutions to mitigate its impact and protect the wildlife that depend on its shelter,” said Miami-Dade County Mayor Daniella Levine Cava. “We know that by partnering with our public and private sector partners, we’ll catalyze new ways to turn this challenge into an opportunity for Miami-Dade County and coastal communities worldwide.”

The Nature Conservancy in Florida (TNC) — a global conservation organization working to create a world where people and nature can thrive — will convene subject matter experts to support the evaluation and selection of the winning companies, to be announced in December 2023.

“The Nature Conservancy is thrilled to work alongside the Miami-Dade Innovation Authority and Miami-Dade County, to foster community engagement and identify cutting-edge technologies that will transform this environmental challenge into a benefit in Miami-Dade and beyond. Sargassum is a vital part of a healthy ocean, but like sunlight and rainfall, too much can be harmful. Increasing sargassum blooms are attributable to many factors, including changes in ocean currents, extreme weather, and warming waters associated with climate change,” said Morgan Higman, Florida Climate Strategy Director, The Nature Conservancy.

Founded as an outcome of a collaboration with Miami-Dade County and key technology leaders, MDIA launched in 2023 with an equal match of private, public and philanthropic funding from The John S. and James L. Knight Foundation, Citadel founder and CEO, Ken Griffin; and Miami-Dade County, for a total of $9 million in seed funding. This challenge is the first in a series of open calls launched by the MDIA as it works to tackle Miami-Dade’s most pressing challenges including health, housing, climate, transportation, and education and opportunity.

Overall, MDIA aims to launch three public challenges throughout each year, with the goal of distributing more than $1 million annually, serving as a blueprint for other cities and municipalities across the world to fast-track innovation to improve the quality of life for residents. As with all business and economic development opportunities, Miami-Dade County is committed to supporting the growth of diverse businesses and advocating for equitable participation of minority and women entrepreneurs in economic opportunities.

The deadline to submit proposals is Friday, September 29, 2023. To submit, please visit the following link.

Axxes Capital Appoints Shane Cunningham to Lead U.S. Offshore and LATAM Distribution

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Photo courtesyShane Cunningham, Axxes Capital Managing Director and Head of U.S. Offshore & LATAM Distribution

Axxes Capital announced it has appointed former Franklin Templeton executive Shane Cunningham as Managing Director and Head of U.S. Offshore & LATAM Distribution.

In his new role, Cunningham will lead the firms’ offshore initiatives across all sales and marketing-related activities for the U.S. Offshore and Latin American intermediary markets and manage all third-party distributors for the region. 

Cunningham brings a wealth of experience to Axxes Capital, following a distinguished career at Franklin Templeton spanning more than 20 years and crossing three decades.

His tenure at Franklin Templeton culminated in his role as a Senior Vice President and Offshore National Sales Manager, where he successfully led the offshore sales team covering the NRC market, Canada, and the Caribbean Islands. He also served as President and CEO of Templeton Franklin Investment Services (TFIS) broker-dealer. 

Axxes Capital’s Founder, Chairman, and CEO, Joseph DaGrosa, Jr., welcomed Cunningham’s  appointment: “The addition of Shane rounds out our highly experienced sales and distribution  leadership team, allowing us to execute on our global growth strategy.”

Parker Roy, Global Head of Distribution at Axxes Capital, added “With Shane’s 20 plus years of experience in US Offshore and LATAM, we look forward to leveraging his insights to deliver attractive private  market solutions specific to this marketplace.” 

Most High-Net-Worth Investors Hire First Advisor They Speak With

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Dynasty Financial Partners announced the results of a Dynasty Connect survey of 1,000 high-net-worth respondents, all of whom work with a financial advisor. The respondents each had a minimum of $500,000 in investable assets. The survey was conducted in partnership with Absolute Engagement between April 20-May 1, 2023, and has a 3.1% margin of error.

According to the survey, a surprising number of wealth-management clients do not shop around before choosing a financial advisor. Instead, they work with the first financial advisor they speak with.

When asked, ‘With how many advisors did you have a conversation prior to hiring your current advisor?’ 57% of respondents stated that they had ‘only spoken to their advisor.’

“It’s an extraordinary finding that high-net worth families are selecting the first and only advisor they speak with. It’s like buying the very first house you look at,” according to Dynasty Financial Partners CEO, Shirl Penney. “At Dynasty Connect, we provide due diligence and deep understanding of the options wealthy families have when seeking financial advice and introduce those families to independent financial advisors suited to meet their needs.”

Trigger for Seeking Advice

In addition, the survey highlighted that a ‘life event’ was often the trigger for seeking professional advice. These life events include ‘received an inheritance,’ and ‘change in employment situation.’

“These findings about life events triggering the need for professional advice highlight the need for high-net-worth families to conduct appropriate due diligence. Investors need to ensure their chosen advisor has the right experience to handle the often-complex nature of these life events for families of significant wealth,” said Mr. Penney.

“Our goal is to ensure a wealthy individual or family can find a financial advisor who dovetails with their needs, personality, and vision,” he said. “It’s paramount to find a ‘custom fit’ in your advisor so you together may achieve your goals.”

Informal Referrals to a New Advisor

The Dynasty Connect Survey also found that when seeking a new advisor, 46% of respondents were referred by ‘a friend, family member or colleague.’ Respondents under the age of 45 are less likely to rely on referrals and use multiple sources to identify potential advisors. Those younger respondents were about 3-times as likely to find a new advisor using online searches, social media, blogs or other online sources.

“Sadly, data show that relying on your friends and family for referrals may not be the wisest strategy for these wealthy investors, as everyone’s circumstances and needs are unique,” explained Mr. Penney.

The survey results underscore that many high-net-worth individuals are not fully aware of the availability or value of a highly-customized relationship with their advisor, according to Mr. Penney.

“At Dynasty Connect, we want to increase awareness and educate families about the benefits of a strong client-advisor relationship,” he said.

Advisor “Churn”

Highlighting the due diligence gap was subsequent advisor ‘churn’. According to the survey, 61% of respondents under the age of 45 that had changed advisors in the past said they changed because of a mismatch in the relationship, described as ‘looking for a different/specific expertise.’

If high-net-worth investors don’t feel they are in a trust-worthy, high-value relationship with their advisor, they end up switching, according to the survey. Respondents said they switched their advisor for reasons ranging from ‘investment performance’ to ‘I didn’t feel like a valued client’ to ‘I needed different or specific expertise.’

“By performing appropriate due diligence, wealthy families could select an advisor that is a better fit from the beginning, instead of expending a lot of time and energy with the wrong advisor,” added Mr. Penney.

Amundi Announces Partnership with Excel Capital to Expand Presence in Chile and Uruguay

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Amundi announced a partnership with Excel Capital (XLC), based in Santiago, Chile, to  further expand the distribution of its UCITS funds across retail market channels in Chile and Uruguay.

With this alliance, Amundi will strengthen its presence in the region and expand its commitment to distribution partners,  private banks and asset management firms in the South Cone.

Excel Capital is one of the largest and most experienced distributors of foreign mutual funds in the Andean Region.  

Lisa Jones, Head of the Americas, President and CEO of Amundi US, said: “This partnership further  supports our long-term commitment to the region and our dedication to serving our clients. As one of the world’s  ten largest asset managers, Amundi has the deep resources and expertise to bring important new opportunities  to our distribution and banking partners in Chile and Uruguay. Excel Capital is well known and respected and we  are excited to partner with them on this expansion of our strategy.”  

Felipe Monardez, Managing Partner of XLC, said: “Amundi is a powerhouse and market leader with an  impressive number of actively managed funds covering different regions and asset classes benefiting our clients  with best-in-class offerings. We look forward to working with Amundi and building a strong presence with retail  investors in the region.”  

Amundi opened its office in Santiago in 2008 and has long served the needs of institutional and retail clients in  the region. Given the strong demand for active management offered by leading global asset managers, Amundi  is expanding its ability to better serve distribution and wholesale partners across Chile and Uruguay.  

Home Prices Expected to See a Slight Decline

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Mortgage rate lock-in will continue to be a major challenge for the housing market in the remainder of 2023, according to the Realtor 2023 Forecast Update.

While prices have eased slightly, higher mortgage rates are hurting affordability, and many of those who already own a home are not incentivized to list. As a result, the total number of home sales (projected to be down 15.8% to 4.2 million) is likely to be at its lowest point since 2012. On the rental side, prices are expected to drop slightly on the year (-0.9%), as strong multi-family construction is improving inventory.

“High inflation and the Fed’s actions to curb it have had a significant impact on the housing market this year. And while inflation has begun to ease, the sustained spike in mortgage rates was enough to stifle the housing market after several years of low rates and strong activity,” said Realtor Chief Economist Danielle Hale. “The housing market has really seen a double whammy in 2023, with a retrenchment in the number of homes for sale coupled with still-high prices and mortgage rates that have kept both first-time and repeat buyers on the sidelines.”

Affordability improving, but still a long way to go
Home prices have been supported by persistent underbuilding relative to household growth over the last decade, but low affordability has had an outsized impact on demand. As a result, Realtor now expects a modest decline in home prices of 0.6% for the year. The expectation is that mortgage rates will also be slightly lower than originally anticipated, but not low enough to bring down buying costs until the end of the year. As inflation is expected to cool gradually, we expect that mortgage rates will start to do the same beginning mid-year and nearing 6% by the end of the year. For the year as a whole, the cost of a mortgage is expected to be up 10.5% compared to 2022.

Mortgage rate lock-in effect impacting inventory
Realtor expects home sales to decline 15.8% in 2023 for a total of about 4.2 million sales for the year, the smallest annual total since 2012. Mortgage rate lock-in has been a stronger factor than initially expected, and the number of homes for sale has not met initial projections. As a result, the expectation now is for inventory levels to slip 5% for the year, and not the growth projected in the initial forecast.

“The vast majority of homeowners locked in low rates during the pandemic and aren’t particularly excited to give them up in order to buy a new home, unless they really need to move for personal reasons,” said Hale.

Rental prices pull back
Challenging conditions in the housing market will lead many to continue renting, driving ongoing demand for rentals through the second half of 2023. However, the strong uptick in new multi-family construction and people choosing to stay in their unit in order to save money is likely to decrease competition for new units and lead to a slight annual decline in rental prices (-0.9%). However, despite this pull-back, rental prices are still historically high with the average rent about $350 more than it was pre-pandemic.

Other economic factors to consider
Despite the Fed’s tightening, the economy and labor markets have shown resilience. And while paychecks haven’t kept pace with inflation, Americans have dipped into pandemic savings and continued to spend money. While this is boosting the current economy, it could have an impact in the future if consumers burn through savings and need to rely on high-interest debt.

Investors Trust Opens New Office in Kuala Lumpur

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Investors Trust will be opening a new Asia sales hub in Kuala Lumpur, Malaysia. The hub will serve as their new service point in Asia, which will  allow the company to expand its operations and provide even better service to its clients and  financial advisors, the firm said. 

The new state-of-the-art facility, located in the prestigious Exchange 106 tower in the new central business district of Tun Razak Exchange, will provide an attractive and modern work ing environment for their Asia sales team along with an impressive location for Investors  Trust’s business partners from around the world, states the text.  

“The relocation of our Asia hub continues our longstanding commitment to the region and  further expands our presence in Malaysia where ITA Asia Ltd is registered as a licensed Insur er by the Labuan Financial Services Authority,” said David Knights, Head of Distribution Asia at  Investors Trust. 

The new office is part of the restructure of Investors Trust (ITA) operations in the region and will serve as the Investors Trust service hub in Asia after the closure of the Hong Kong office on June 30th,  2023. The relocation is a strategic decision that reflects the company’s preference to concern trate their sales and operations functions in one location where ITA is fully licensed in order to  provide optimal service and expand its reach across the region.

Pictet Asset Management: Secular Outlook 2023

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Securing single-digit annual returns from a diversified portfolio could prove an unusually complex task in the next five years, largely because of volatile inflation and more muscular state intervention.

Overview: return projections for the next five years

Investment strategies will need an overhaul over the next five years. And for several reasons. Economic growth for the rest of this decade will remain stubbornly below average as inflation – while in retreat – is likely to be unusually volatile. Greater state intervention in the economy, meanwhile – in industries such as cleantech, semiconductors and defence – will not only add to the public debt burden but could also increase the risk of policy mistakes and capital misallocation.

The headwinds become more powerful still when the effects of weak productivity, labour shortages and tighter financial conditions begin to manifest themselves with greater intensity. Yet for nimble investors, and those prepared to venture beyond the beaten track of developed equity markets, several potentially rewarding opportunities remain.

Opportunities

  • Emerging markets, quality stocks and green industries represent attractive investment opportunities
  • Many parts of the fixed income market – US Treasuries and emerging market bonds in particular – are attractively priced
  • Private debt offers the possibility of attractive returns for investors willing to lock up their capital

Threats

  • Greater state intervention globally could increase the risk of policy mistakes
  • Returns on traditional portfolios balanced between equities and bonds will be lower, around half the historical norm
  • The rate of inflation will be considerably more volatile even if price pressures moderate

Secular trends

A more interventionist state

Stung by the experiences of the Covid pandemic and the Ukraine war, governments are prioritising domestic resilience and national defence.

The renewed geopolitical rivalry will reconfigure global commerce. Industries that attract the greatest amount of state subsidies – such as semiconductors, green technology, cybersecurity and defence – may well see an improvement in their fortunes.

Yet the broader picture is one of increased risks for investors. The likelihood of policy mistakes will increase as governments and regulators become involved in the management of their economies.

Inflation will fall but it will also be more volatile

We expect inflation to drift back towards levels consistent with central bank targets over the next five years. But this will come with a cost: the rate of inflation will be considerably more volatile.

Returns on traditional portfolios will be lower. As a consequence, economies will grow at below their own long-term trend while returns from traditional balanced portfolios will also be lower than the historical average.

Brace for a labour shortage

An ageing population and the shift to flexible working are exacerbating labour shortages around the world. This is already lowering productivity and curtailing the world economy’s long-term growth potential. China’s shrinking population will make matters even worse.

The adoption of automation could become a more urgent priority.

Avoiding a prolonged economic stagnation will mean making even greater use of automation and machine learning to boost productivity.

But a tech transition will be a long and complicated process.

Opinion written by Luca Paolini, Pictet Asset Management’s Chief Strategist.

Click here to read the full investment outlook.