

- 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.
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.


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.

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.

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.
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.
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.
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