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2021 Investing Themes Presented by iShares/Blackrock

 I attended an interesting presentations given by IShares/Blackrock with the goal of showing how to use their ETF products to capitalize on investing themes for 2021:

Gargi Pal Chaudhuri - Head of iShares Markets & Investments Strategy

Dorothy Lariviere - iShares Product Consultant

iShares (by BlackRock) - 2021 Outlook: New President, COVID-19, and Policy

I found that this presentation was quite interesting. The presenters included two women which was a pleasure to see and they were quite intelligent and well-spoken. I don't advocate for any particular investment or forecast, but I thought that the summary was interesting and if you want to review the particular symbols they mention as ways to act on these themes, they are included at the end.

US GDP Forecasts Above 6% for 2021

This presentation included a forecast that perhaps is not too shocking, but a positive report that GDP looks to be positive and a substantial number. The drivers for this include the ongoing fiscal and monetary policy along with progress on the covid vaccines. Indeed, the fiscal policy is close to ~25% of GDP. 

Inflation Expectations are around 2-2.5%

Hawkish fed watchers may be concerned, but the presenters were not overly concerned with the increase in the 10 year treasury rates (up around 1.5% as of my writing this). According to the presenters there are variety of factors driving this including:

  1. Bottlenecks within supply chains
  2. Pent-Up demand as stores and the economy open back up
  3. Commodity price increases
Put simply, the presenter is not concerned with inflation or rising rates that are modest (she mentioned about 25 bps from here) with the idea that it is important that the amount of growth is part of the amount of increase in real economic activity. 

Ongoing Themes Strong

The ongoing theme of transition from brick-and-mortar continues. The ongoing theme of the fed being accommodative is expected to continue for quite some time. And the theme of globalization is expected to continue. This led to the most interesting recommendation from my perspective in the presentation, the recommendation to consider Emerging Markets, in particular because global growth and commodity price upswing should help in that area.

Personally, I had rebalanced and found that one area I moved into was Emerging Markets. Of course there's danger that this is just confirmation bias, but I found that the information was interesting. If you want to see the information I saved from the slides, shoot me a message. 

Tickers Mentioned in the Presentation

MCHI: IShares MSCI China ETF
IEMG: iShares Core MSCI Emerging Markets ETF
EMXC: iShares MSCI Emerging Markets ex China ETF

XT: iShares Exponential Technologies ETF
IDNA: iShares Genomics Immunology and Healthcare ETF

FALN: iShares Fallen Angels USD Bond ETF
USHY: iShares Broad USD High Yield Corporate Bond ETF

If you are a Fidelity client, keep an eye out for these kinds of presentations which is where I caught this one. This one was great. I've seen others offered by Vanguard as well and I was pleasantly surprised. 


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