Aviva Investors expects solid recovery but some growing pains

Aviva Investors, the global asset management arm of Aviva PLC, continues to expect a robust global recovery in the rest of 2021 and throughout next year, although growth is expected to slow sequentially. Moreover, risks to growth are now judged to be balanced, largely because of downside concerns in China and some re-opening frictions. Global growth should reach 6.5% this year and 4.5% next.

house view

Inflation has risen more rapidly than expected, partly because of factors such as energy prices, but partly because supply has struggled to keep up with rapidly reviving demand. Much of this is expected to be transitory, a view shared by most developed market central banks. As a result, they are not expected to raise policy rates for some time. Compared to three months ago, upside inflation risks are slightly higher, but it is still projected to fall back in 2022.

The higher that inflation peaks and the longer it persists, the greater the danger that it becomes more entrenched in the minds of business, households and governments. If it were to feed more meaningfully into the labour market in the form of higher wage demands, then monetary authorities might have to respond more aggressively. As COVID worries subside, fiscal support will fall away automatically, but fiscal policy is not expected to be tightened significantly in most places.

Michael Grady, head of investment strategy and chief economist at Aviva Investors, said:

“Our constructive outlook for growth means that our asset allocation remains broadly pro-risk and we continue to be modestly overweight global equities. However, we have scaled back that position marginally because of growing pains which could impact sales and margins.

“We have also tilted to a mix of more defensive sector exposures such as healthcare in addition to existing cyclical sectors such as energy and industrials.

“We also remain modestly underweight duration, but have also scaled back that position because of the more balanced distribution of risks regarding global growth. Comparatively tight spreads mean that we continue to see corporate credit as less attractive than equities.”

For more information contact:

A picture of Laura Cocker

Laura Cocker

Media Relations Manager

A picture of Victoria Howley

Victoria Howley

Media Relations Manager

Important information

The information and opinions contained in this document are for use by the financial press and media only. No reliance may be placed for any purpose on the information or opinions contained in this document nor should they be seen as advice. 

The press release is provided on the basis that Aviva Investors Global Services Limited is not causing the communication of a financial promotion under exemption of the Financial Promotion Order, as Aviva Investors Global Services Limited has no control over the way in which an article based on this press release is prepared and published by the financial press and media. 

Except where stated as otherwise, the source of all information is Aviva Investors Global Services Limited (“Aviva Investors”) as at 14 October 2021. Unless stated otherwise any views, opinions expressed are those of Aviva Investors. They should not be viewed as indicating any guarantee of return from an investment managed by Aviva Investors nor as advice of any nature.  The value of an investment and any income from it may go down as well as up and the investor may not get back the original amount invested. 

Issued by Aviva Investors Global Services Limited, registered in England No. 1151805.  Registered Office: St Helen's, 1 Undershaft, London, EC3P 3DQ   Authorised and regulated by the Financial Conduct Authority.

Aviva Investors

Aviva Investors is the global asset management business of Aviva plc. The business delivers investment management solutions, services and client-driven performance to clients worldwide. Aviva Investors operates in 14 countries in Asia Pacific, Europe, North America and the United Kingdom with assets under management of £262 billion in assets as at 30 June 2021.

AVIVA PLC

  • For information on how Aviva is helping our people, customers and communities impacted by COVID-19 visit: www.aviva.com/covid-19-our-response/ 
  • We exist to be with people when it really matters, throughout their lives. We have been taking care of people for more than 320 years, in line with our purpose of being ‘with you today, for a better tomorrow’. In 2020, we paid £30.6 billion in claims and benefits to our customers.
  • Aviva is invested in our people, our customers, our communities and our planet. In 2021, we announced our plan to become a Net Zero carbon emissions company by 2040, the first major insurance company in the world to do so. This plan means Net Zero carbon emissions from our investments by 2040; setting out a clear pathway to get there with a cut of 25% in the carbon intensity of our investments by 2025 and of 60% by 2030; and Net Zero carbon emissions from our own operations and supply chain by 2030. Aviva has been leading this agenda for decades: Aviva was the first international insurer to go operationally carbon neutral in 2006 and we are champions of renewable energy and energy storage at our offices, allowing us to achieve our 2030 carbon reduction target (70% reduction on 2010 levels) 10 years early. Find out more about our climate goals at www.aviva.com/climate-goals and our sustainability ambition at www.aviva.com/sustainability.
  • Aviva is a Living Wage and Living Hours employer and provides market-leading benefits for our people, including flexible working, paid carers leave and equal parental leave. Find out more at www.aviva.com/social-purpose 
  • We are focused on the UK, Ireland and Canada where we have leading market positions and significant potential. We will invest for growth in these markets. We will also transform our performance and improve our efficiency. Our transformation will be underpinned by managing our balance sheet prudently, reducing debt and increasing our financial resilience. We also have strategic investments in Singapore, China and India.
  • At 30 June 2021, total Group assets under management at Aviva Group are £522 billion and our Solvency II shareholder capital surplus is £12 billion. Our shares are listed on the London Stock Exchange and we are a member of the FTSE 100 index.
  • For more details on what we do, our business and how we help our customers, visit www.aviva.com/about-us  
  • The Aviva newsroom at www.aviva.com/newsroom includes links to our spokespeople images, podcasts, research reports and our news release archive. Sign up to get the latest news from Aviva by email.

You can follow us on Twitter

You can follow us on LinkedIn: www.linkedin.com/company/aviva-plc

For the latest corporate films from around our business, subscribe to our YouTube channel