Navigating Today’s Market SHIFTs

A confluence of geopolitical and macroeconomic events in 2022 have upended markets. While it is easy to be distracted by the short-term news flow and market noise, it is best to focus on the longer-term horizon, exploring the broader trends shaped by these events.

Sustainability. Healthcare. Inflation. Federal Reserve. Technology. These are some of the conundrums confronting investors as the world SHIFTs and adapts to a post-pandemic future. While the scale of the change seems daunting, it is possible to identify a robust set of investment strategies that can withstand the course of an economic cycle — the key is understanding what the mid- to long-term implications of this evolution are.


Can sustainable investing drive real world change?
Notable Number
The aspirational temperature threshold ascribed in the landmark 2015 Paris Agreement*
Why it Matters

From climate change to inequality, the state of the world has never been a more urgent focus. Recent events have demonstrated the fragile interconnection between environmental, social and governance issues with geopolitics and financial markets. As the world grapples with these challenges, greater demand for social and environmental action and profound policy shifts are expected to reshape financial markets. A growing commitment to sustainability is already prompting reallocation of capital among asset owners and investors, who increasingly recognize the power of private capital to drive positive social and environmental outcomes.

Get Our Perspective
*Source: United Nations Climate Change


Are healthcare stocks still defensive in this uncertain backdrop?
Notable Number
Global healthcare spending for 190 countries between 2000 and 2018*
Why it Matters

Investors seek balance between defensiveness and growth amid volatile markets. The healthcare sector offers a mix of both defensive and dynamic characteristics, even in times of economic uncertainty. From a defensive perspective, the sector benefits from a steady stream of inelastic demand. This is complemented by strong dynamic trends, driving innovation in the sector at an ever-increasing pace, presenting investors with attractive potential opportunities around the world.

Get Our Perspective
*Source: World Health Oranisation. As of 10 December 2020.


How will rising prices and inflation impact asset allocation in various asset classes?
Notable Number
US consumer inflation in August 2022 from a year ago*
Why it Matters

Inflation is a hot topic for investors and policymakers alike. After flying under the radar for almost 40 years, it is surging at a rate not seen in generations. As hopes of a short-lived burst of price pressures fade, generating a satisfactory level of income has become an acute challenge that is prompting investors to revisit their asset allocation and the type of strategies that will deliver enough real return in such an environment. Distinguishing between short-term pain from secular trends will guide investors in their choices of investment strategies that are poised to benefit from this new paradigm.

Get Our Perspective
*Source: US Bureau of Labor Statistics. As of August 2022.


How should investors adapt as central banks tackle inflation?
Notable Number
2022 forecast for Federal funds rate*
Why it Matters

Interest rates fell to historically low levels in the wake of several major crises such as the global financial crisis in 2008, sovereign debt crisis in the early 2010s, and the coronavirus pandemic in 2020, as central banks tried to revive battered global economies.
Lately, however, soaring prices are prompting central banks to pivot to inflation fighting. The US Federal Reserve’s (Fed) rate hikes, in particular, have unsettled financial markets, with both equity and fixed income markets correcting sharply in the first half of 2022. The good news for investors is that normalizing interest rates and deflated valuations are offering opportunities that had not been seen for a long time.

Get Our Perspective
*Source: Bloomberg. As of June 2022.


Can tech companies regain lost momentum against rising inflation and interest rates?
Notable Number
Global spending on IT in 2022, an increase of 3% in 2021*
Why it Matters

In the last low-growth decade, tech companies offered a winning combination of consistent and profitable growth, disrupting traditional industries and incumbents with strong network effects. They were also an investor darling during the pandemic, with many business models proving resilient to widespread lockdowns. Although tech stocks have sold off this year as inflation and rising rates slow growth, disruptive innovation and secular growth trends like AI and cloud computing continue to help create investment opportunities in the post-pandemic economy.

Get Our Perspective
*Source: Forecast by Gartner. As of July 2022.

AllianceBernstein Hong Kong Limited (聯博香港有限公司) is the Hong Kong representative of AB’s Luxembourg-domiciled investment funds, and over 40 funds have been authorized by the Securities and Futures Commission (SFC) for retail distribution in Hong Kong. It is also the investment manager of the AB (HK) Unit Trust Series, which is an open-ended unit trust established as an umbrella unit trust under the laws of Hong Kong, and its sub-funds. For general and sales information, please call 2918 7888. Such authorization does not imply any official approval or recommendation.

SFC authorization is not a recommendation or endorsement of the Fund or its sub-funds, nor does it guarantee the commercial merits of the Fund or any of its sub-funds, or their performance. This does not mean the Fund or its sub-funds are suitable for all investors, nor is it an endorsement of their suitability for any particular investor or class of investors.

This website has not been reviewed by the Securities and Futures Commission.

The issuer of this website is AllianceBernstein Hong Kong Limited (聯博香港有限公司).

© 2022 AllianceBernstein L.P.