Reviews. Commentaries. Opinions.

2020 to 2021 Market Insights

2020 to 2021 Market Insights

Goodbye 2020 – Welcome 2021

In Israel, we feel the mix of fear of growing virus numbers as well as the optimism from the roll out of the vaccine. We hope the vaccine will reach each of you as soon as possible and hope that in time those skeptical towards the side effects will be proved wrong. It's seems that most of our webinar attendees believe COVID will still be with us in 2021 and that most of them will get vaccinated. Let's get Corona behind us!

chart1Throughout Corona period, we have hosted numerous webinars via Zoom and have found this to be a major positive consequence of the virus. We recently held a webinar focused on 2021 key investment themes and you may follow the link to view it. For those who prefer to read, we will summarize the main points of that webinar here for you. During our webinar we asked the attendees to predict what will happen in the main issues discussed. Below you will find some more of the results.

Looking back at 2020


Year to Date


Max. drawdown

in March 2020

S&P 500 Equity



FTSE 100 Equity in GBP






Emerging Market Equities



High Yield Bonds



Global Investment grade bonds



Discipline paid off well. If you were reasonably invested in January 2020 and did not touch your portfolio, you would have ended 2020 just fine. Being a little tactical and investing in pretty much anything from April 2020 would have significantly enhanced returns.

Pioneer's Global and Shekel portfolio positioning in 2020 worked exceptionally well and we count ourselves amongst the best performers in the industry.

In late February and early March we de-risked portfolios slightly and in April we bought Nasdaq, which was up over 40% by December. In addition, we bought Investment Grade bonds, which are up over 12% and Chinese Internet ETF in May, which is was over 30% by year end.

When we look back at 2020 the issue we are most happy about is the how our portfolios behaved in March 2020, when the global markets panicked. This proves our risk management and "max drawdown" philosophy was working very well. The consequences of government intervention during Corona in capital markets will be with us for many decades to come - mainly in the form of low interest rate environment. Even if rates increase slightly, we do not expect to see a complete normalization of rates for many years to come.

Key issues for 2021

USD – How low can it go?

chart2Whilst we are confident that the USD is still the world's reserve currency without any true second place contender, we must recognize that the USD is under pressure of late. We also need to be careful what we wish for because a sudden strengthening of the USD would almost certainly mean a risk off scenario and a falling equity market. The Israeli Shekel has been on a strengthening trend since early 2000's. This has accelerated of late with significant gas exports to Egypt. Whilst it is possible, and even likely, that we will see a minor rebound of the USD/NIS rate the long-term trend looks likely to continue. Most of our webinar guest seem to think so too.

Is there a bubble in Stocks?

Possibly the most common question we are faced with. If you exclude the tech giants, you will get a different picture entirely about the stock market. Most importantly for us, stocks are attractive relative to bonds. So, even if the valuations are stretched on an index level, and they may very well be, there is still value on a relative basis compared to bonds. As rates are low, stock market investors will be supported by huge sums of money seeking returns.

Impact or Responsible Investing

chart3One of the biggest trends ever emerging in the world of finance is Impact or Responsible Investing. The terminology is confusing and varies, but basically we are talking about Environmental, Social and Governance (ESG) factors used to screen companies to make sure the portfolio is as ethnically invested as possible. As you can see from our poll results most agree this isn't a temporary trend.

At Pioneer, we have the ability to build ESG portfolio's using our traditional asset allocation experience and our independence, which means we can choose the best possible solutions for clients. We are running ESG in parallel with traditional portfolios for now. In the future, when the conviction is there, we may merge the two approaches. For now, if clients want to direct their portfolio in that direction, they just need to ask.


If you watched the webinar, I articulated that there were three scenarios: Deal, No Deal or Delay. I concluded that a delay was the most likely scenario and a no deal being the second most likely, with negative consequences for the Sterling. Subsequently, Boris Johnson has announced a deal – proving my crystal ball is far from perfect… The details of this deal are still being understood and many feel a lot of the key issues have not been fully worked out. None the less, this imperfect deal is significant progress and the USD GBP rate has held steady.

Low Yielding bonds

Possibly the biggest challenge for 2021 and onwards is low yielding quality bond market we all face as investors. As quality bonds are a meaningful percentage of most private client portfolios, investors must accept either a lower range of expected returns or they must take different or additional risks. Additional risks may mean a higher equity percentage and by different risks we mean structured notes or alternative investments. Pioneer has increased its sourcing of both of these types of investments.

For more detailed information, follow the link to our 2021 Key Investment Themes webinars in English or in Hebrew. As always, you can send our investment team your questions to

The aforementioned information is not a substitute for personal Investment marketing, which takes into account the particular circumstances and special needs of each person. The views expressed in this Review should be considered as market comment for the short term for information purposes only. As such the views herein may be subject to frequent change, are indicative only and no reliance should be placed thereon. This Review does not constitute legal, tax or accounting advice, or any investment recommendation, or any offer to buy or sell financial instruments of any kind, and does not take into account the investment objectives or needs of specific investors. Although this Review has been produced with all reasonable care, based on sources believed to be reliable, reflecting opinions at the time of its writing and subject to change at any time without prior notice, neither Pioneer Wealth Management nor any other entity or segment within the Pioneer International Group makes any representations or warranties as to the accuracy or completeness hereof and accepts no liability for any loss or damage which may arise from its use. The writer and the company are unaware of any conflict of interest at the time of publishing the above commentary.


About the Author

Mike Ellis

Mike Ellis

Director and Chief Investment Officer

Mike Ellis, originally from South Africa, joined Pioneer in March 2000 after working in the Private Banking & Trust industry in the UK. At Pioneer he was the group CFO for the better part of the last decade. Today Mike serves as a director and is the CIO.

Mike is a Chartered Accountant, a CFA charter holder and received his MBA from Tel Aviv University & Kellogg Business School. Mike is also an Oxford University Alumni having participated in the Said Business School's Global Investment Risk Management Program. In addition, Mike is a licensed Portfolio manager by the Israel Securities Authority.

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