PERSPECTIVE3-5 min to read

"An extraordinary year": Investment webinar

Caspar Rock and Chris Lewis discuss an incredible year in markets and explore the themes shaping our outlook.



Caspar Rock
Chief Investment Officer
Christopher Lewis
Head of Investment Strategy, Wealth Management

“This has been a truly extraordinary year”, says Caspar Rock, Chief Investment Officer of Cazenove Capital. “2020 saw one of the deepest falls in US equity markets of the past 100 years. But as the year draws to a close, the S&P 500 is in positive territory.”

We have seen a “K-shaped recovery,” suggests Caspar. It has been marked by a sharp divergence in the performance of different sectors, with some thriving amid the pandemic and others floundering.

The rebound has been facilitated by huge support from governments and central banks, equivalent to 25-35% of GDP in major economies.

We expect to see a strong economic recovery in 2021, followed by another strong year in 2022. This is “a similar pattern to what we saw after the financial crisis of 2008.”

Political developments

Investors are pleased that the uncertainty of the US election is out of the way. However, US politics could still provide a surprise. A runoff vote in Georgia early next year could yet produce a Democrat-controlled Senate. 

There may be less change in US policy towards China than some expect. Recent surveys show there is increased wariness of China amongst both Democrats and Republicans.

Closer to home, we expect a “skinny” Brexit deal of relatively limited scope. However, this is preferable to no deal, which could result in significant short-term disruption.


“The approval of a vaccine should continue to support the recovery we have seen in cyclical assets,” says Caspar.

However, we maintain conviction in our core investment themes; technology, healthcare, rising government debt and fiscal spending and sustainability.

We expect interest rates will remain low for the foreseeable future. This should support equity markets, which still look attractively valued compared to bonds. Low rates should also support gold, though greater optimism on the recovery could see the precious metal experience more volatility over the coming months.

Longer-term themes

Chris Lewis, Investment Manager, discussed a number of longer-term themes which we think will be important over the coming years. These are: 

Energy transition

Global emissions must fall by 33% from 2010 levels by 2030 to limit climate change to 2ºc. This will require huge public and private sector investment, creating attractive investment opportunities. It is also an area of focus for fiscal stimulus, with 37% of the EU’s 750 billion euro recovery fund earmarked for projects related to climate change and sustainability.


The pandemic accelerated the trend towards de-globalisation, with many companies localising their supply chains. We see this as a headwind for multinational businesses and potentially supportive for small/mid cap domestic companies.

Importance of China

The country is likely to continue to become a larger part of the global economy. We expect the political and economic decoupling of the US and China to continue, even if Biden’s election victory makes the relationship somewhat less volatile. The recently-agreed Regional Comprehensive Economic Partnership (RCEP) will increase China’s influence in a region that makes up a third of the global economy.

This article is issued by Cazenove Capital which is part of the Schroders Group and a trading name of Schroder & Co. Limited, 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. 

Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested.

This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements.

All data contained within this document is sourced from Cazenove Capital unless otherwise stated.


Caspar Rock
Chief Investment Officer
Christopher Lewis
Head of Investment Strategy, Wealth Management


Global Market Perspective
2020 market volatility
Economic views

The value of your investments and the income received from them can fall as well as rise. You may not get back the amount you invested.