Every quarter, Canterbury's Outsourced CIO committee shares their observations of the market that impact the management of our discretionary portfolios in the Canterbury Outsourced CIO Commentary.
As the first quarter of 2021 progressed, governments across countries made a concerted effort to move toward some semblance of normality. A decline in new COVID cases, vaccine availability, and the continued commitment by central governments to maintain accommodative policies have all contributed to improved economic activity, albeit at a very different pace in various regions.
The strong performance of the equity markets reflects that the financial markets may have discounted much of these near-term dynamics around the unwinding of the lockdowns. Where uncertainties remain is whether the tilt over time is likely to be around growth and inflation, or whether the uneven recoveries open roads further to economic divergence and the potential stagnation. We have incorporated a number of changes within our client’s portfolios over the last year, including a few manager changes where we believed their portfolio’s performance pattern was drifting outside of our range of expectations.