LONDON (Reuters) - Cybersecurity could be one of the key post-pandemic investment themes in an equity-friendly world of low interest rates and vaccine-led recovery, LGIM CIO Sonja Laud said on Monday.
Laud, who oversees 1.2 trillion pounds ($1.60 trillion) at Legal & General Investment Management, Britain’s biggest asset manager, said the rollout of vaccines and economic recovery would support equities and sectors such as emerging markets next year, especially as government bond yields would be held low.
“So risk exposure to equities should be your preferred asset class,” Laud told the Reuters Global Investment Outlook Summit, predicting the stellar market rally would broaden from a select number of tech firms to encompass growth-sensitive companies as well.
“If you get a normalisation... then there is a broader opportunity set for investors to choose from,” she said.
Overall equity returns around 20% were “plausible” in the event of vaccine deployment and good use of fiscal stimulus, Laud added.
For the longer term, Laud said a raft of investment themes had emerged from the devastation of the pandemic, which has dramatically altered patterns of work, travel and leisure worldwide, not least by forcing millions to work from home.
She said contrary to all expectations, LGIM traders had successfully worked from home after the pandemic erupted in March, managing to navigate the worst market turbulence. Many employees are expected to continue working from home even after lockdowns end.
“Now if you are head of IT at LGIM you will be worried in terms of cyber security; all of a sudden your remit is not just your office in Coleman Street, you have to make sure the way you equip your system is fit for purpose even if your entire staff works from home,” she said.
“So, if you think of cybersecurity as a theme, that’s not going away, it’s going to stay and prosper... in cybersecurity your enemy is always a step ahead of you, they don’t sleep and continue to develop so you need constant innovation and R&D.
“These are some of the longer-term implications of what we just witnessed and fabulous themes to invest in.”
Laud also said:
*logistics supply chains for online retail and pharma cooperation were among other post-pandemic structural themes
*Emerging market bonds and equities look attractive
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($1 = 0.7493 pounds)
Additional reporting by Dhara Ranasinghe; Editing by Dan Grebler
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