Language | 
English
Spanish
Over the second quarter of 2021, global equity markets continued their strong emergence from last year’s pandemic induced recession. During Q2, the LOM Equity Growth Fund gained 7.59%, modestly outperforming it stated benchmark, the MSCI World Stock index which advanced by 7.19%.
Equity market gains were widely distributed across industries in the quarter with the largest winners being the Information Technology (11.56%) and Communications Services sectors (10.72%). Laggards during the period were the Industrials (4.48%), Consumer Staples (3.83%), and Utilities (-0.37%) sectors.
In Q2, investor focus shifted from whether we are recovering from the pandemic towards how the Federal Reserve is managing the risk of supporting the labor market and avoiding runaway inflation. This has been causing some rotation among sectors and styles boxes such as growth and value.
Global economic growth prospects brightened over the second quarter as the world continued to slowly reopen. In the U.S., progress has been surprisingly strong with the Atlanta Fed recently forecasting Q2 growth to come in at a very robust +10.0% annualized pace. At June’s Federal Open Market Committee (FOMC) meeting, the Fed’s updated Summary of Economic Projections placed the median estimate of calendar 2021 real gross domestic product (GDP) at +7.0%, a half point increase from the prior projection. Economic output had nearly achieved pre-pandemic levels this spring and is expected to go higher, but in a more volatile fashion.
The global recovery will likely remain strong but somewhat uneven and dependent on the effectiveness of vaccination programs and public health policies. Already, we have seen ongoing fits and starts such as rising COVID-19 case counts in the UK, Russia and elsewhere, owing to the “delta variant” which has caused concerns among healthcare professionals.
Global growth is now expected to be 5.8% this year after a series of sharp upwards revisions from earlier projections. The vaccine rollout in many of the advanced economies has been driving the improvement as has America’s massive fiscal stimulus. World GDP growth is expected to be 4.4% next year but total global income could still be about three trillion less by end 2022 than was expected before the crisis hit. As the recovery continues to unfold, we continue to look for value and growth opportunities on a selective basis.
The information contained in this article is for information purposes only, and represent the views of the author. It is not intended as specific investment or financial advice, or a recommendation or solicitation to buy or sell any security. Any investments or strategies listed in this article may not be suitable for all investors. Past performance is not indicative of future performance, and as with any investment, prices may fluctuate. It is recommended that advice is sought from a qualified investment professional prior to implementing any financial plan. LOM has made every effort to ensure that the contents herein have been compiled from sources believed reliable, however LOM does not warrant the accuracy, adequacy, timeliness, or completeness of this information expressly disclaims liability for errors or omissions in this information.
