(Bloomberg) – Goldman Sachs Group recommends that US investors avoid stocks in companies that exhibit high wage inflation, as there will be a key difference in 2022 as actively managed funds missed out on opportunities to perform better last year.
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Banking strategists led by David Costin wrote in a statement on Sunday that as economic growth slows, many companies will see limited sales growth, so the ability to cope with inflation and interest rates will be crucial. According to strategists, regular returns on equity investments are less likely to be affected by macroeconomic factors.
Last year, only 20% of mutual funds focused on companies with large caps exceeded the S&P 500, with only 15% of mutual funds focusing on growth compared to the historic average of 32%. Goldman. According to the note, value-centered financial managers performed better compared to the average of 41%, with 56% breaking the benchmark.
Strategists are starting 2022 with less clarity than last year on US central bank policy and the path of the epidemic. Inflation is one of the big questions, affecting supply chains, wages and the position of the Federal Reserve. Many market analysts predict that there will be at least some volatility in this coming year.
“The spread of equity returns is very clear when viewed through the margin channel,” the executives wrote, estimating that companies in the S&P 500 would record a margin expansion from 0.40 percentage points to 12.6%. The path of interest rates this year will have a significant impact “after the sudden reversal in bond yields by 2021 triggering large factor cycles in the stock market”.
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