Stocks that lead the field

According to the Chinese zodiac, 2020 is the Year of the Rat – a clever, quick-thinking creature seen as a sign of wealth, surplus and often creating success. Before exploring how to sniff out returns, let’s take a lead from this resourceful animal’s attitude to analyse the emerging macro economic themes, sectors and stocks that have the best potential of outperforming in 2020 and beyond. (See “How they were chosen”, page 44).

We know interest rates globally are at record lows, depressing returns of fixed-income assets while also driving up asset prices and pushing equities to all-time highs, as investors are forced to take on more risk to achieve higher returns. You may have read a lot about “lower for longer” with respect to interest rates. And while this is traditionally good for economies and for households, at present it is pointing to an expectation of lower economic growth globally for the short to medium term.

Lower rates are being used by most central banks to encourage