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2021 Outlooks (Wellington)

First Quarter 2021 

Thought leaders from Wellington Management provide their outlook on issues that may influence markets and portfolios going forward.

Multi-Asset Outlook: Is the Rotation for Real?

Nanette Abuhoff Jacobson, managing director and multi-asset strategist for Wellington Management and global investment strategist for Hartford Funds

Daniel Cook, CFA, Investment Strategy Analyst

Over our 12-month horizon, we think vaccine news, reopening economies, and still-strong policy support will predominate and mark a turning point in the market narrative.
  • Encouraging vaccine data, policy support, and gradually reopening economies make us more confident in taking a pro-risk stance over our 12-month time frame.
  • Safe, effective vaccines could be the catalyst for a durable rotation from growth- to value-oriented exposures.
  • Within equities, we prefer Europe, Japan, emerging markets, and smaller caps, and think cyclical sectors are attractive relative to growth sectors.
  • Downside risks include broad lockdowns as a result of a second COVID-19 wave, a spike in interest rates, and geopolitical tensions during the US lame-duck session. Upside risks include another major dose of policy stimulus.

Read More »


Global Equities Outlook: factor insights, perspective on value, environmental, social, and Governance (ESG) integration, and Opportunities in Emerging Markets

Katrina Price, CAIA, Investment Director

Gregg Thomas, CFA, Director, Investment Strategy

Dan Pozen, Equity Portfolio Manager

Rich Hoffman, Investment Director

Andrew Corry, CFA, Equity Portfolio Manager

Jim Shakin, CFA, Equity Portfolio Manager

Peter Fisher, Equity Portfolio Manager

Mary Pryshlak, CFA, Head of Investment Research


History wasn’t much of a guide for anything that happened in 2020. We think the year's results raise questions about market expectations and valuations and have investment implications for the year ahead.

  • The pandemic acted as an accelerant for some of the fundamental trends driving the performance of growth and value. 
  • ESG research helps build confidence in a business’s resilience and trust in its management team, which are  vital to maintaining our conviction during periods of challenging performance.
  • Underlying economic fundamentals have already started improving and we anticipate further economic improvements.
  • As incomes rise in emerging-market nations, there’s an increased awareness of food safety and the risks associated with lower-quality suppliers. This is driving the growth of premium staples and reputable brands and contributing to the consolidation and formalization of restaurant chains.
  • COVID-19 has highlighted the incredible importance of healthcare to both the individual and the economy. Beyond the pandemic, we see many exciting long-term opportunities in the sector.


View PDF »


Fixed-Income Outlook: More Positives than Negatives

Campe Goodman, CFA, Fixed Income Portfolio Manager

Rob Burn, CFA, Fixed Income Portfolio Manager


Despite persistent risks and challenges in today's extraordinary environment, we see areas of value and opportunity for fixed-income investors heading into 2021.

  • Bank loans represent one of our highest-conviction investment ideas for multisector portfolios. We believe concerns over rising default rates are more than adequately priced into today's attractive loan spreads.
  • We believe investors can find opportunities in emerging-market (EM) corporate debt, in some high-yield EM sovereigns and, to a lesser degree, in select frontier markets.
  • We do not view the recent increase in corporate debt levels in a wholly negative light, given the need for businesses to improve liquidity in today's uncertain business environment.
  • In the post-pandemic period, we see fewer investment opportunities in structured finance than we once did. Securitized credit tied to residential housing may be the exception.

View PDF »


Geopolitical Outlook: 2021: A Year of Great-Power Competition

Thomas Mucha, Geopolitical Strategist


Geopolitics will remain an important feature of markets and macroeconomics in 2021. Barring a surprise, domestic policy matters—particularly COVID-19 management and economic recovery—will dominate political agendas in Washington, DC and globally. 

  • Increasing multipolarity and deepening great-power competition will make for a difficult structural backdrop to manage in 2021 and beyond. 
  • Climate-related policies are likely to take center stage, providing ample opportunities for investors.  
  • In the current geopolitical environment, companies that learn to adapt and innovate may be best positioned to take advantage of  investment opportunities going forward.

view pdf »


Global Economic Outlook: A Temporary Crisis But a Permanent Fiscal Response

John Butler, Macro Strategist


In the short term, some level of economic deterioration can be expected. But with a COVID-19 vaccine in sight, the focus of recovery will shift to fiscal policy. The details will matter.

  • Positive developments on the vaccine front are a game changer for the global economy and should allow for greater confidence that the pandemic  crisis will be temporary.
  • After the world has adjusted to news of a vaccine, the market will turn its focus to fiscal policy: what form it will take and how persistent it will be.
  • Countries will likely choose from three fiscal approaches: (1) fiscal “prudence,” (2) economic redistribution policies, or (3) an emphasis on investment.

View PDF »


ESG and Sustainability Outlook: Sharper Focus on Sustainability

Wendy Cromwell, CFA, Director of Sustainable Investment

Campe Goodman, CFA, Fixed-Income Portfolio Manager 

Tara Stilwell, CFA, Equity Portfolio Manager

Chris Goolgasian, CFA, CPA, CAIA, Director of Climate Research

Julie Delongchamp, CFA, Climate Transition Risk Analyst

Hillary Flynn, Director of ESG, Private Investments

Carolina San Martin, CFA, Director of ESG Research


The defining issues of 2020 were a stark reminder of the inextricable links between capital markets and real-world events. Investors are very much a part of the global economy, which is shaped by climate change, public health crises, and social justice issues.

  • In 2021, our Impact Investing Team will focus on opportunities in areas of the market that represent much-needed solutions in the COVID-19 era, including healthcare, digital connectivity, and technical support for small businesses.
  • Our Climate Research Team will deepen its research agenda to more fully understand and value the advancing risks and high costs of climate change.
  • Our ESG Research Team will engage on critical issues such as transparency, diversity and inclusion, executive compensation, and resiliency.

View PDF »

Important Risks: Investing involves risk, including the possible loss of principal. • Foreign investments may be more volatile and less liquid than U.S. investments and are subject to the risk of currency fluctuations and adverse political and economic developments. These risks may be greater for investments in emerging markets or if the Fund focuses in a particular geographic region or country. • Fixed income security risks include credit, liquidity, call, duration, and interest-rate risk. As interest rates rise, bond prices generally fall.  • Loans can be difficult to value and highly illiquid; they are also subject to nonpayment, collateral, bankruptcy, default, extension, prepayment and insolvency risks. • Investments in high-yield (“junk”) bonds involve greater risk of price volatility, illiquidity, and default than higher-rated debt securities.  • There are risks of focusing investments in securities of companies in the utilities and industrials sectors which may be sensitive to developments in those sectors. • Risks of focusing on investments that involve sustainability, environmentally responsible and climate focus investment criteria may influence investment performance or competing funds expose the Fund to increased risks related to downturns or other adverse developments in that market segment.

The views expressed here are those of Wellington Management. They should not be construed as investment advice. They are based on available information and are subject to change without notice. Portfolio positioning is at the discretion of the individual portfolio management teams; individual portfolio management teams and different fund sub-advisers may hold different views and may make different investment decisions for different clients or portfolios. This material and/or its contents are current as of the time of writing and may not be reproduced or distributed in whole or in part, for any purpose, without the express written consent of Wellington Management or Hartford Funds.