Den forventede pengepolitiske stramning har først og fremmest ramt teknologiaktier og spekulative aktier. Siden maj sidste år har disse aktier mistet 40 pct. i værdi. Men det skyldes også, at mange aktier har været overvurderet i forhold til deres indtjening. Citi vurderer, at nogle af aktierne, f.eks. fintech, payment og cybersecurity er kommet ned på et niveau, så de er værd at investere i. Generelt mener Citi, at diversificeringen har vist sin værdi det seneste år. Da mange virksomhedsledere venter en høj virksomhedsindtjening, venter Citi et stærkt første kvartal.
Implications of Fed Tightening on Tech Stocks
Throughout the COVID-19 pandemic, the Fed injected liquidity into the financial system while driving interest rates to zero, which in turn, pushed investors to take more risk. Now, with the expectation of higher rates and diminished lending from the Fed’s balance sheet, the market is revaluing fast-growing but highly speculative businesses, as demonstrated by the selloff in many tech stocks.
For individual portfolios, this market dynamic aligns with Citi’s guidance to seek quality amid times of market uncertainty and less accommodative macro policies.
Until markets absorb the shift in monetary policy, Citi analysts expect large-cap tech stocks and quality, dividend-yielding names to outperform more speculative ventures that may not have access to the abundant and easy financing they once did.
Past performance is no guarantee of future results. Real results will vary.
The story of venture capital and PE of the past few years illustrates this point. Valuations of tech company IPOs rose dramatically over the past six years.
But in Citi’s view, the upward valuation trajectory of these hot companies may not be sustained. In May 2021, Citi analysts cast doubt on the boom in IPOs of pre-revenue firms (the average of which had a US$6 billion valuation). Indeed, since May 2021, these same firms have lost about 40% in value.
Since 1Q21, the “slow, boring and prudent” approach of diversified portfolio construction has been the winning strategy. Global Investment Committee (GIC) portfolio asset allocation has moved to a more defensive positioning: keeping exposure to long-term growth assets that are changing the world economy and tactically overweighting defensive growth and income-generating assets found in dividend growth shares.
Valuations in several key elements of Citi’s Outlook 2022 Unstoppable Trends, like payments, fintech and cyber security have come down to reasonable levels relative to their expected growth rates. Citi analysts think there may be a potential opportunity to add some of these names to portfolios today.
Investors are also now turning their attention to earnings season, and record-high CEO confidence suggests another strong quarter.
