Capital Markets Autumn 2020

Key Observations and Themes

Beyond The Election We believe there are enduring investment trends that will transcend politics and last much longer than the next four years. These drivers of change may produce compelling investment opportunities over the long term.

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I

Lending vs. Owning With interest rates at very low levels, stocks look attractive relative to bonds. We believe equities will outperform fixed income over the long term.

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II

Valuation Equity valuation looks more attractive after accounting for low interest rates and changing business models, which generate increased cash relative to earnings.

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III

The Economy On the rebound from the global pandemic shock, the economy has some significant tailwinds.

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IV

Style Wars Powerful structural forces have caused Growth to diverge from Value. Shifts in leadership are likely but the long-term trend should stay intact, in our view.

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V

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