The funds bet on a consumer boom to compete with the ‘roaring twenties’


Night economy before the ban on meetings of more than six people

Photographer: Anthony Devlin / Bloomberg

Some of the world’s top money managers are betting on a post-pandemic spending boom that will power real-world businesses as economies reopen and people get back to normal lives.

Investors at Aberdeen Standard Investments Inc. and GAM Investments for UBS Asset Management are investing more and more money in companies where face-to-face interaction is the norm, such as travel companies, restaurants, offline shopping, and “consumer experiences.” .

“A lot of people are estimating this will really lead to a new ‘crazy 20s’ theme,” said Swetha Ramachandran, manager of GAM’s Luxury Brands Equity fund, referring to growing views that post-pandemic spending will go back to the excesses of the 1920s. That’s when euphoric consumers piled up in a spending spree after World War I and the 1918 flu pandemic. “There will be a lot of peacock” as people start to socialize, He said.

The superior performance of the & quot;  out of stock & quot;  accelerated in february

Investors began piling up cyclical stocks benefiting from an economic rebound late last year following good news on the vaccine front, as they pulled out of high-value tech stocks. Turnover accelerated as Treasury yields rose in mid-February. Now, with stimulus checks making their way across the U.S., the recipient of half of the $ 2.9 trillion in savings accumulated globally during the pandemic: consumer stocks will experience an even greater rebound.

US Retail Sales Soared Last Time Stimulus Checks Were Issued

Certainly no one is saying that the pandemic is about to end. Europe faces a slow rollout of vaccines, with renewed restrictions on daily life in some countries, while the seven-day average of new Covid-19 cases in the US. skyrocketed, showing that cases in the United States are increasing again and threatening to return to normal life. Digitization is here to stay – no retailer will ever return to a world of pure bricks and mortar.

But a short-lived shift to consumer discretionary stocks in November, when “reopen” trading became all the rage, has room to catch up. A sub-indicator of global energy stocks is the best performer by sector since late October, up 53%, while the consumer discretionary index is only 17% higher.

Consumer discretionary stocks have lagged in other reopening trades since November

In fact, the Global Consumer Discretionary Actions gauge is expected to return 17% over the next 12 months, according to data compiled by Bloomberg, while the S&P 500 Index is projected to rise 12%.

“People want to travel. They want to see a family they haven’t seen in a long time. They want to hang out with friends, ”said Donny Kranson, European Equity Portfolio Manager at Vontobel Asset Management.

Theme parks, airlines, and even beer are making a comeback.

On the travel side, funds are betting on vacation-friendly hotels like Marriott International Inc. and shared housing company Airbnb Inc., theme parks like Six Flags Entertainment Corp. and even the online travel agency. china Trip.com Group Ltd, listed in the US, based on interviews with Miller Tabak + Co., Scottish Investment Trust and AGF Investments Inc.

Marriott has gained 11% this year so far, while Airbnb, Six Flags and Trip.com have advanced 19%, 41% and 11%, respectively. All have surpassed the S&P 500 in 2021.

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