Trends Watch: Economic Perspectives

August 20, 2020

By Elana Margulies-Snyderman 

EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.  

This week, Elana talks with Marcos Bueno, Founder and CIO, Ascent Systematic Advisors.

What is your outlook for alternatives?

Given the potential returns offered by bonds and equity markets at current yields and valuations, I expect interest in alternatives to increase. Stock pickers, macro and niche strategies should benefit going forward. At the same time, the pressure on fees will continue for those that are not able to provide value for money to their investors, or are undifferentiated -- among other reasons, because actively managed ETFs will outcompete them.

What is your outlook for the economy?

Obviously, COVID-19 has been a tremendous shock to the economy. While the impact has been undeniably negative, there are sectors of the economy that have benefited, and those heavily affected will undergo a process of restructuring that will ultimately make them more resilient. The catalyst that COVID-19 has been for large scale deployment of remote working technology will unleash a new wave of productivity, and it will bring economic growth to geographical areas that were previously depressed. This, coupled with a determined attitude to stimulate the economy from central banks and governments makes me think that the recovery will be stronger than most people expect.

What keeps you up at night?

Inflation. Monetary authorities and governments are committed to bringing inflation back for a number of reasons -- not least, the acute need to debase fiat currencies in order to lessen the effective debt burden. At the same time, inflation risks have been completely dismissed by the market. I do believe that central banks will ultimately succeed in bringing back inflation and that it will translate into market shocks and potentially, if my growth outlook is wrong, stagflation.

The views and opinions expressed above are of the interviewee only, and do not/are not intended to reflect the views of EisnerAmper LLP.

 

About Elana Margulies-Snyderman

Elana Margulies-Snyderman is an investment industry reporter and writer who develops articles, opinion pieces and original research designed to help illuminate the most challenging issues confronting fund managers and executives.