Wells Fargo Investment Institute: The New Landscape

Rhea-AI Summary

Wells Fargo Investment Institute has published a report titled "The New Landscape," examining enduring trends arising from the pandemic and their impacts on consumer behavior and business activities. Key topics include potential shifts in equity leadership, monetary policy coordination, and the emergence of a new commodities bull. The report encourages investors to reassess their asset allocation strategies to leverage growth in a low-rate environment, emphasizing equities while still appreciating the role of bonds in managing volatility. Investors are advised to broaden equity exposure and increase commodity allocations.

Positive

• Report outlines potential for shifts in equity leadership.
• Investment strategies highlight increased allocations to commodities.
• Encouragement for investors to reassess asset allocation for stronger growth potential.

Negative

• None.

Wells Fargo Investment Institute (WFII) today released a special report, “The New Landscape,” which looks at what pandemic-related trends may be here to stay in the coming months and years, how these trends might affect consumer patterns and business activity, and what types of assets are poised to potentially benefit.

“The global pandemic accelerated certain market trends that were already underway and sparked new ones,” said Darrell Cronk, chief investment officer of Wells Fargo Wealth & Investment Management. “Our report examines the trends at play as we enter a new normal and investor considerations for potential post-pandemic prospects.”

The report delves into each of the following topics:

• Tracking potential shifts in equity leadership
• Coordinated monetary and fiscal policy
• Is a new commodities bull emerging?
• WFII looks for elements of active investing that are making a comeback
• Considerations for post-pandemic prospects
• Keys to restarting your small business

“Investors should assess their current asset allocation strategies and adjust for stronger growth potential amid a continued low-rate environment,” said Tracie McMillion, head of global asset allocation strategy for WFII. “We are more favorable on equities, but it’s important to note that bonds can still help moderate volatility.”

The report outlines five considerations for investors:

1. Broaden equity asset-class and sector exposure
2. Be selective with fixed-income holdings
3. Increase allocations to commodities
4. Employ hedging strategies to take advantage of rising merger & acquisition activity and mitigate downside risk
5. Invest in leading-edge companies and income-producing assets through private capital

Download the report, “The New Landscape,” read “Avoid four potential post-pandemic pitfalls with these investment strategies” on Wells Fargo Stories, and watch a video discussing the top trends to watch and how to position your portfolio.

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About the Wells Fargo Investment Institute

Wells Fargo Investment Institute is a registered investment adviser and wholly owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company, providing investment research, strategy, manager research and thought leadership within the Wealth and Investment Management division, with the goal of supplying world-class advice to the company’s financial and wealth advisers. Wells Fargo Wealth and Investment Management, a division within the Wells Fargo & Company enterprise, provides financial products and services through bank and brokerage affiliates of Wells Fargo & Company.

About Wells Fargo

Wells Fargo & Company is a leading financial services company that has approximately $1.9 trillion in assets and proudly serves one in three U.S. households and more than 10% of all middle market companies in the U.S. We provide a diversified set of banking, investment and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending; Commercial Banking; Corporate and Investment Banking; and Wealth and Investment Management. Wells Fargo ranked No. 30 on Fortune’s 2020 rankings of America’s largest corporations. In the communities we serve, the company focuses its social impact on building a sustainable, inclusive future for all by supporting housing affordability, small business growth, financial health and a low-carbon economy. News, insights and perspectives from Wells Fargo are also available at Wells Fargo Stories.

Additional information may be found at www.wellsfargo.com | Twitter: @WellsFargo.

Risk Disclosures

Different investments offer different levels of potential return and market risk. The level of risk associated with a particular investment or asset class generally correlates with the level of return the investment or asset class might achieve. Stock markets, especially foreign markets, are volatile. Stock values may fluctuate in response to general economic and market conditions, the prospects of individual companies, and industry sectors. Bonds are subject to market, interest rate, price, credit/default, liquidity, inflation and other risks. Prices tend to be inversely affected by changes in interest rates. The commodities markets are considered speculative, carry substantial risks, and have experienced periods of extreme volatility. Investing in a volatile and uncertain commodities market may cause a portfolio to rapidly increase or decrease in value which may result in greater share price volatility.

Alternative investments, such as hedge funds, private equity and private real estate funds are not suitable for all investors and are only open to “accredited” or “qualified” investors within the meaning of U.S. securities laws. Any offer to purchase or sell a specific alternative investment product will be made by the product’s official offering documents. Investors could lose all or a substantial amount investing in these products. Some alternative strategies may expose investors to risks such as short selling, leverage risk, counterparty risk, liquidity risk and commodity price volatility risk. In addition, alternative strategies engage in derivative transactions. Short selling involves the risk of potentially unlimited increase in the market value of the security sold short, which could result in potentially unlimited loss for the fund. In addition, taking short positions in securities is a form of leverage which may cause a portfolio to be more volatile. Derivatives generally have implied leverage and may entail other risks such as liquidity and interest rate and credit risks. Successful hedging strategies may require the anticipation of future movements in securities prices, interest rates and other economic factors. No assurance can be given that such judgments will be correct.

News Release Category: WF-ERS

View source version on businesswire.com: https://www.businesswire.com/news/home/20210318005621/en/

FAQ

What is the focus of Wells Fargo's report 'The New Landscape'?

The report focuses on pandemic-related trends affecting consumer patterns and business activity, along with investment strategies for the post-pandemic environment.

What are the key investment strategies suggested in the report?

Key strategies include broadening equity exposure, increasing allocations to commodities, and employing hedging strategies to mitigate risks.

How does the report suggest investors adjust their asset allocations?

It recommends reassessing asset allocation strategies to capitalize on growth potential in a continued low-rate environment.

What market trends does the Wells Fargo report identify as enduring?

It identifies potential shifts in equity leadership, coordinated monetary and fiscal policy, and the emergence of a new commodities bull.

When was the Wells Fargo Investment Institute report released?

The report was released on March 18, 2021.