Exposure rates of the Dorval Asset Management Range – 19th March 2021

Growth in the United States has been upgraded spectacularly on the back of a trio of factors i.e. the economy opening up again as a result of vaccines, fiscal and monetary support, and the savings built up during health restrictions predictably being mobilized.

This now begs the question of US exceptionalism – with Biden’s fiscal program – as compared with Europe lagging behind and China with its already normalized situation (cf. chart 1).


Europe is admittedly dawdling, but the path forward is clear and the region is set to receive a major boost when the economy actually opens up again: this is particularly true for France, Spain and Italy where exposure to the tourism and leisure sector is very high. Investors can still look to the future and beyond short-term pandemic-related difficulties, particularly if fiscal and monetary support is in place.


The Fed continues to stick to its course, while making no moves to intervene in the bond correction, which marches on with both inflation projections and real interest rates rising (cf. chart 2). Despite this trend, financial conditions remain highly accommodative (cf. chart 3).


Looking to cyclicals vs. defensives themes, some ground has already been covered in terms of pace and investor positions, but scope still remains as regards relative valuations (cf. chart 4).



Our main scenario still focuses on the recovery, despite successive lockdown moves followed by an easing in restrictions, and regardless of doubts on the vaccination campaign in Europe. We maintain a cyclical slant in our portfolios with themes devoted to reopening of the economy and green growth strategies.


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