- With increasing vaccination in most developed nations and a gradual economic recovery shaping up, Q1 2021 saw a broad market recovery with equities outperforming fixed income, but with rising volatility. This highlights the importance of diversification.
- The expectations of an economic recovery generate concerns about inflation. This caused interest rates to rise on the long end and steepen the yield curve. Central banks have stated they are likely to keep interest rates lower for longer.
- Endowus Cash/SRS portfolios have generated better than market returns for portfolios with equity allocations. The Balanced (60-40) portfolio had outperformed the index by 1.58% over the quarter despite many commentators predicting its demise, after a stellar year in 2020
- Value and small factors came roaring back in Q1 and interest in the long term factors of returns are increasing.
- Despite many predictions of the demise or death of the 60-40 balanced portfolio, last year was a stellar year
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