Corporate results are also showing that demand is in a very strong position across a wide range of industries, but that operational issues and inflationary pressures are rife and show little sign of abating yet. Indeed, supply chain issues are seemingly worsening rather than improving. In addition to semiconductor and freight issues, labour shortages are emerging across multiple parts of the major economies, most problematically in the transportation sector. When combined with strong demand and a large increase in the money supply due to Covid, this is leading to inflationary behaviour such as panic buying, and it is quite possible that we will see corporates look to reverse the previous trend of ever tighter inventory levels and ‘just in time’ supply chains. This is something we will continue to monitor.
Given such aspects of uncertainty, we feel that our approach of investing in a broad range of companies from different sectors and stages of their lifecycle has never been more appropriate and will allow performance to continue to be driven more by the success of our hunting for undervalued long term cashflows than by the prevailing winds of the macroeconomy, or factors such as growth or value styles being in vogue.
The value of investments and the income from them may go down as well as up and is not guaranteed. Investors may not get back the amount invested.
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For Professional Clients only, not suitable for Retail Clients. This is a financial promotion and is not investment advice. The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change, and is not investment advice.
For more information on the risks of investing, please refer to the Prospectus and Key Investor Information Document (KIID), available on the relevant Fund Information page at www.rlam.co.uk.
Issued in November 2021 by Royal London Asset Management Limited, 55 Gracechurch Street, London, EC3V 0RL. Authorised and regulated by the Financial Conduct Authority, firm reference number 141665. A subsidiary of The Royal London Mutual Insurance Society Limited.