EELCO UBBELS
CONSULTANT
ALPHA RESEARCH
Score prediction: CZECH REPUBLIC 0 – ENGLAND 2
INVESTMENT INSIGHT:
The Czech Republic knows many industries, but looking at technology and especially at crypto, they are in the lead. The Trezor is a unique hardware wallet from the company SatoshiLabs from capital Prague. It might be controversial, but the Czech Republic needs something like the Trezor in the game against England, otherwise it will lose.
Every fund selector starts with quantitative screening and if we start with the country ranking, England is among the favourites and unfortunately the Czech Republic is much lower on the UEFA ranking. At the bookmakers, almost 70% assume England will win and a draw is only given 21% chance.
Looking at the matches played between them, England has won out of four times twice and there was one draw. Encouraging for the Czech Republic is that the only match they won against England was the last one they played, winning 2-1.
The Czechs can take courage from the game they won in 2019 and maybe they have got an ace up their sleeve!
Investing is dealing with uncertainties, but without a strategy it is difficult to achieve a good performance. Football is no different. The Czech Republic will therefore have to be very consistent in dictating their own strategy on the pitch.
Let us end this piece of writing with some words by Johan Cruijff and feel free to turn the word ‘football’ into ‘fund selection’:
- It is better to go down with your own vision than with the vision of someone else.
- If you play on ball possession, you don’t need to defend, because there is only one ball.
- Football is a game of mistakes. Whoever makes the fewest mistakes wins.
JOHN HUSSELBEE
HEAD OF MULTI-ASSET
LIONTRUST ASSET MANAGEMENT
Score prediction: CZECH REPUBLIC 1 – ENGLAND 2
INVESTMENT INSIGHT:
While the 2020 contraction for the UK was the heaviest for 311 years – and worse than during the two World Wars, the Great Depression and the global financial crisis in between – we are certainly not predicting anything like such longevity of fallout this time around.
We are currently positive on the UK, at least from an equity perspective; with conditions increasingly shifting against more speculative growth and technology companies, including rising bond yields, we continue to highlight the market as an attractive option amid the global reflation trade.
Positive factors include cheap valuations, plenty of potential cyclical upside, and structural biases to sectors such as financials, energy and materials, which were weak in 2020 but have been outperforming the general market so far this year.
If covid-19 cases, mortality and hospitalisations continue to fall, leading to the ending of the lockdown, the UK will look more investable, especially at current attractive valuations. Once global investors have confidence in a recovery, it is natural to seek more risk and buy beaten-up stocks, of which the UK has many. M&A also started to pick up last year and we would expect this to continue, both from international players and well-capitalised UK names.
In any region, we typically tend to own growth, value and core/index funds, tilting between these to take advantage of opportunities as they arise.
