The growing wealth divide across the developed world is leading to a new political environment, one where people increasingly vote against the status quo. Brexit and Trump are key examples of this, but are by no means alone.
Populist parties and nationalist voices have also been rising across Europe, leading to great shifts and often dangerous departures from established political identities. The increase in support of anti-establishment parties is, in part, a result of greater inequality. It is also linked to the perceived threat of immigration, both in Europe and the US.
This political backdrop is important for investors to consider, as it is also closely linked to changes in government and monetary policy, and therefore investment markets and our clients’ capital and financial futures.
As one of the UK’s leading investment managers, LGIM offers knowledge and experience that can bring real benefit to investors looking to understand economics, policy and politics. It’s this diverse wealth of expertise which enables our asset allocation team to provide the latest political news and insightful articles on these movements.
Our Asset Allocation team includes dedicated and accomplished US, European and Global economists, whose focus is to assess the macroeconomic environment across the developed world. This includes researching government policy, emerging political trends, as well as the outlook for economic growth and inflation. Our economists then work with our team of strategists and portfolio managers to translate their views into what this means at a portfolio level.
“Familiarity breeds complacency”. With the best intentions in the world, even an annual review can feel like you’re simply going through the motions year after year. Recognising this means shaking things up when the chance presents itself. In this case, that's when a birthday and the opportunity to record a podcast came around.
History suggests that equities struggle to make gains ahead of US mid-term elections. With anti-trade rhetoric likely to feature in this autumn’s campaign, this time is unlikely to be different. On the other hand, we have also learnt to be prepared for the opposite with President Trump.