FidelityConnects: Active asset allocation: Global opportunities

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<b>Subtitles are AI Generated</b>

 

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Hello and welcome to Fidelity Connects.

 

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I'm Pamela Ritchie. Markets show resiliency, but the next phase

 

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may be far less straightforward.

 

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Geopolitics, energy shocks, and inflation are starting to pull in different

 

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directions. And our next guest says, we're in for an uneasy

 

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equilibrium, and the next few weeks could be critical.

 

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So what matters most for investors at this next phase as it unfolds?

 

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Joining us here today to examine the trends and the themes driving both global

 

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equity markets and bond markets is Ayesha Akbar.

 

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She is portfolio manager of Fidelity Global Asset Allocation

 

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Fund. She's joining us from London.

 

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Lovely to see you. How are you today?

 

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I'm very well. Thank you, Pamela.

 

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Always a pleasure to be here with you.

 

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Delighted to have time to speak with you here today.

 

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And we've been all watching markets.

 

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You've been watching them probably far more closely than there's just been

 

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anyone else in terms of the allocation story and what you're doing.

 

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I wonder if you'd take us back, Aisha, to the beginning of the year

 

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and sort of to get to the point of how much change you've made.

 

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But why don't you begin with sort of January, 2026 and how you entered the

 

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year.

 

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Great place to start and it's amazing to think how much has happened in the

 

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last few months. So we started over the year pretty positive

 

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on markets and that was really because the growth story looked

 

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pretty good. What we were worried about really was about

 

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inflation perhaps not being as low as everyone was anticipating

 

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and that really was because we worried a little bit that

 

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the AI story that had been powering markets.

 

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Wasn't going to be as productivity enhancing as perhaps

 

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markets were hoping for.

 

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So that kind of meant that, you know, that great growth story, you know, the

 

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U.S. Doing fantastically well, the rest of the world not doing too

 

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badly either. Emerging markets actually doing pretty well.

 

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That growth story was pretty good.

 

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You know, inflation, yeah, maybe a little bit of a problem.

 

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And from a top-level perspective, that kind of meant to that, we were

 

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positive risk assets. They tend to do better when my growth is strong.

 

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Which meant we were overweight equities and we didn't particularly care that

 

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much for bonds and didn't want to hold cash in this environment.

 

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And that worked really well for January and February.

 

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In fact, perhaps a little bit too well, markets really did start off

 

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on a pretty big tear.

 

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And I guess you have to be careful about what you wish for, because obviously

 

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we all know what happened at the end of February and March.

 

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And that really was a little bit of a shock to the system.

 

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So, you know, obviously events in the Middle East had a pretty,

 

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pretty immediate effect on oil prices.

 

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And the view that we took initially was this was far

 

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more likely to be a supply-shy inflation stock rather than

 

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necessarily a growth problem.

 

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And what that meant was that actually the way we were positioned wasn't too bad

 

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at all because, you now, it was gonna hurt.

 

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You know, inflation bonds in particular a little bit more than perhaps the

 

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growth story. And that's kind of where we stayed.

 

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And one of the reasons we didn't make too many changes, you know since

 

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it's the start of the conflict, was really because markets have been incredibly

 

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volatile. So what we didn t want to do was sort of make too many

 

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changes and just be on the wrong side of particular dates.

 

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Now the good news, of course, in terms of what we've seen happen so far

 

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is that that.

 

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You know, we have come to a sort of ceasefire event.

 

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You know, you called it, you know an uneasy equilibrium.

 

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And I think that is a pretty good way of really kind

 

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of characterising it because it isn't really in anyone's interest that

 

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things escalate from here.

 

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You know from the American side, you know obviously

 

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keeping the straights open is quite important.

 

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You don't necessarily want the rest of the world plunging into recession.

 

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And from an Iranian perspective, you know, given that they're making a little

 

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bit more money than they have from their oil exports, you know really sort

 

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of escalating things, making things worse, making it more difficult for them

 

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to get their oil out isn't necessarily in their interests as well.

 

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So, you, know, uneasy equilibrium. Why is it uneasy?

 

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Because, you have, there's too many different.

 

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Moving parts people with different interests so a little bit of

 

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escalation could potentially have quite quite you know problematic effects

 

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but the issue really sorry good go ahead

 

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Well, I was just going to say, and actually, you're probably getting to it, but

 

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at this point, there's been a discussion of markets can be resilient,

 

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and we sort of opened saying that.

 

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And I'm kind of curious whether that's in the US or if the rest

 

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of the world can falter a little bit and

 

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the US powers forward. Anyway, you'll get to that.

 

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But that is sort of the allocation story and China being sort of one of the

 

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question works there.

 

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So really two things there.

 

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So one of the reasons we were reasonably confident that not changing

 

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our stance too early was the right thing to do, was because if you think about

 

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sort of what's been powering the global economy, clearly the US is

 

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pretty important on that side.

 

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And really all of the data was indicating that that was gonna continue

 

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to be the case.

 

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So really some really strong numbers coming out that way, labour market is

 

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generally folding up, although starting to look a little bit I'm sorry.

 

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On the downside from here, but you know, data generally holding up

 

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pretty, pretty well. The other thing of course to remember is what was

 

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happening on China, you know the two, the other main engine of global growth.

 

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And China really had been okay.

 

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You know, it hadn't been sort of, certainly not as bad as people were expecting

 

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earlier. But what has been really interesting since the conflict

 

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started is actually how well China has held up.

 

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And if anything, the GDP data really does confirm that

 

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it did better than before, albeit a lot of that due to the export

 

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story that China is exporting to the rest of

 

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the world. And of course, that was one of the things that happens when you

 

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have global economy in a good place, people want to buy.

 

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So both of those engines doing reasonably well, which

 

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made us a little bit more confident. The question, of course is what happens

 

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going forward from here.

 

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And what happens specifically outside of

 

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the US? Because it's hard, I'm curious if you start to look

 

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at the world through those that are energy producing nations

 

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or not. This becomes sort of the supply model.

 

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Do we have the right ones?

 

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Do we start to look at demand destruction ultimately?

 

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Where do you, how do you sort of split it if you do?

 

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Yeah, I mean, I think so for us, it's really been a question of taking down our

 

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top level views on markets in terms of perhaps that risk reward

 

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between equities and bonds isn't as good as it was initially,

 

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you know, at some point that sort of supply shock or

 

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inflation shock becomes a demand destruction story as well.

 

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So the question really becomes is where is that going to have the biggest

 

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amount of Now, clearly, not every

 

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part of the world is going to be impacted the same way by what is happening in

 

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the straits. Now, the first impact has been on Asia.

 

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Asia is pretty vulnerable in terms of what is happening.

 

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And when I say Asia, I mean sort of Asia ex-China, the East

 

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Asian economies in particular, big importers of

 

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oil.

 

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And I think so far, it was a little bit better than expected, because actually

 

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one of the things that we've all learned in the last five, six years is have to

 

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make supply chains a little bit more resilient.

 

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So pretty much day two of the conflict, you had people sort of putting in

 

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measures that sort of restricted use, made it a bit more efficient working from

 

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home, et cetera. But that can only take you so far.

 

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And especially in Asia, you know, it takes about six weeks for tankers full

 

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of oil from the Straits, which is where most countries get their oil from to

 

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kind of reach where they are. And we're really at that stage and beyond it now.

 

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So this is when the crunch really starts to happen.

 

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You know, so while it is really good news that the ceasefire is holding,

 

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unfortunately, from a market perspective, diplomacy takes a lot longer than

 

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the economy can necessarily tolerate.

 

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So we really need to start to see a few more ships getting through

 

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than we have at the moment in order for Asia to benefit.

 

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So Asia clearly at risk.

 

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The US on the other side, obviously not as badly affected.

 

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Europe is somewhere in the middle, you know, we kind of benefited here

 

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in my part of the world that we're coming into sort of summer seasons where

 

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we don't need necessarily as much gas.

 

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Unfortunately for Europe you know having reduced the dependency on Russian

 

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gas, now we've taken a hit from the you know hit to

 

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facility season plaza which was you know a pretty big source of gas coming

 

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through as well. So not a great scenario from that perspective

 

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as well so. A first hit to Asia, Europe not looking particularly

 

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great, but emerging markets is a different story overall because there's

 

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definitely parts of the emerging market complex that benefit from this.

 

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So we talked about China being quite resilient and having reserves, but

 

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actually Natam is an area that's doing particularly well because

 

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they are sort of commodity exporters and a little bit more aligned with what's

 

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going on in the US especially now.

 

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So really showing quite a lot and resilience.

 

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And the other parts that have been doing really well in Asia are places like

 

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Korea. I mean, that AI story is really continuing

 

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and empowering ahead. So at the top level, yes, but lots of

 

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stories to play beneath the surface.

 

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Take us a bit further into the Lat-Am story.

 

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This sometimes is discussed within the spheres of influence story.

 

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So for instance, the Americas become sort of under the umbrella of the US

 

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spheres of influence. I mean, there are problems with this analogy and it's

 

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not all a copacetic thing necessarily, but is that what you

 

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see in terms of investment? Because China's had quite a lot of influence in

 

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South America over the last decade or so.

 

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Will that be crimped at this moment?

 

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Because of an oil blockade or do you see anything fading there?

 

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So I think, you know, these things always take a little bit of time to play out

 

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in terms of geopolitics. And really our interest from an investment

 

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point of view is to see what impact this has on growth and inflation.

 

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So the nice thing about what has happened in the US and especially in

 

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Latin America, sorry, especially if you look at sort of, you what happened

 

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earlier in the year with Venezuela is that it was

 

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relatively quick, relatively aligned.

 

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You know, there is likely to be a lot more investment.

 

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In that part of the world coming from the States.

 

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And as one of my very smart colleagues put it, that

 

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when you have a corporate takeover, the acquirer

 

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gets the credit rating of the person who's doing the acquisition.

 

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So there's potentially a big benefit to come from

 

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being a little bit more closely aligned with the economics of the

 

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United States.

 

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Is it safe in that sense?

 

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I mean, again, from an investment perspective, is it sort of a safe place to

 

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invest? Because you can bet that, for instance, the US isn't

 

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perhaps going to consider expanding, or if they are gonna expand there, it's

 

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gonna be sort of beneficial situation rather

 

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than what we're seeing in Iran, for example.

 

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I don't think we can really say anything at this stage, but what we can

 

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say on a relative basis, it definitely looks a little bit better than other

 

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parts of the world.

 

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In terms of being proximity, is the U.S.

 

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Really going to sort of create more issues in its own sphere?

 

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Probably not. And one of the things perhaps we have learned

 

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from Iran is that what potentially most people,

 

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certainly in markets also thought would be a relatively short concert.

 

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Can become a lot bigger and gone out with all the

 

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consequences that come with that.

 

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So, you know, we, you, know, let's, let us not kid ourselves, we know what's

 

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going to happen, but certainly on a relative basis, it does look a slightly

 

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better environment in that part of the law.

 

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If we go to the discussion of how oil, its trajectory

 

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from here, and we do sort of take note of the WTI versus the

 

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world benchmark price for Brent, but

 

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take us a little bit into the oil story from here and where the

 

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demand destruction might initially happen.

 

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I mean, China is sort of a big one and a notable one, but I'm just curious if

 

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there's more nuance in actually areas that can sustain themselves may be

 

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true. Special reserves and so on that actually look better to

 

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invest in. Are there some surprises out there on kind of who is exposed less

 

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exposed to oil?

 

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So I think, again, China is one of the countries that has really come out

 

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of this looking pretty good.

 

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If you look back at what China had been doing the last couple of years is

 

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really every time oil prices dipped.

 

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And remember, we had oil at about $60 at the start of the year and they had

 

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been topping up their reserves.

 

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So, you know, best guess they have about six months of strategic reserves.

 

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They have diversified their usage of different energy sources.

 

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So, you know, definitely being prepared, saving up for a rainy day

 

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has paid off. And that's one of the reasons we're, you know, China has been

 

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relatively resilient in what has happened.

 

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But it's not just about oil, I would say, Pamela, because, you know,

 

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Brent in particular, since you mentioned it really has kind of settled in that

 

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sort of, you 100, 105 dollar range for a

 

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while with a bit of volatility around it.

 

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But it's not necessarily just about the oil price because oil

 

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is certainly a consideration, but there's a lot of other things that happen

 

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in that part of the world that are gonna be pretty crucial for what happens in

 

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the next six months going forward. So one of the more obvious things is how

 

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much fertiliser comes out of that part.

 

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And if you look at prices with that, you know, Urea in particular,

 

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prices really haven't come down for that at all.

 

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I know helium is another one that is quite useful

 

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for tech type stuff as well.

 

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So there are going to be implications that we have going forward,

 

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insurance rates have gone up, freight rates have gone up.

 

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So it's not just about those things, these are going have an impact going

 

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forward. So that's one of many reasons why I'm a little bit

 

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cautious, markets really do seem to be wanting.

 

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You know, to go up on every sign that things are de-escalating and that's

 

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certainly a good thing, but even from here, you know the

 

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prospect of things continuing down this road for another few weeks even,

 

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I think we you know there is a real potential that we might start to see

 

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shortages. So you know I think being a little bit prudent trying to take a bit

 

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of profits on markets as they continue going up is probably

 

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the right thing to do.

 

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So that, as well as do you see a dispersion story being

 

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quite interesting at this moment?

 

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Or again, do you just hold on that?

 

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I'm curious how you're looking at that.

 

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Yeah, so taking down our top level risk, but really, you know,

 

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putting our money into places that really could benefit beneath the surface.

 

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So we talked about regions, I think one of the things that we are,

 

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you know, starting to add back to is things like,

 

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you know, the tech stories, because, you know, in addition to all the other

 

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things in terms of, you know the earnings being quite resilient, you know, that

 

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we've seen so far. It's really about where is the only

 

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part of the world that potentially could see rate cuts.

 

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This is the other story that perhaps we haven't talked about in terms of

 

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there's gonna be a new Fed chair coming through and the chances are that they

 

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will err towards being a little bit dovish.

 

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That's not gonna happen in Europe but that's not going to happen in many other

 

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parts of the World.

 

16:11.070 --> 16:14.206

Because they finish the rate-cutting cycles in most places, I mean, they're

 

16:14.206 --> 16:15.574

done.

 

16:15.574 --> 16:19.745

They're done and any chance of anything more happening because of the inflation

 

16:19.745 --> 16:22.147

shock is just not going to happen.

 

16:22.147 --> 16:25.584

So the only place that potentially could is the U.S.

 

16:25.584 --> 16:29.621

And as long duration assets tech probably benefits more than other

 

16:29.621 --> 16:32.758

parts of the economy.

 

16:32.758 --> 16:36.195

So that's sort of the regional and sector story.

 

16:36.195 --> 16:40.532

Is there something beyond tech though, in terms of sectors?

 

16:40.532 --> 16:44.670

You know, there's other things that we can play, but it is

 

16:44.670 --> 16:48.407

pretty niche in terms of, you know, we still think financials are a pretty good

 

16:48.407 --> 16:51.210

place to be, not necessarily so much in the U.S.

 

16:51.210 --> 16:55.381

We still think in Europe there's places to play.

 

16:55.381 --> 16:59.685

We are still holding on to, you know, the hedges in terms energy

 

16:59.685 --> 17:02.621

for all the reasons that we've just talked about, you know that uneasy

 

17:02.621 --> 17:06.158

equilibrium means you could get a spike in things going forward.

 

17:06.158 --> 17:10.195

And, you know, we're kind of holding on to our defence plays as well.

 

17:10.195 --> 17:13.699

You know, unfortunately, given the world that we live in, you can have a lot of

 

17:13.699 --> 17:16.969

parts of the world that are really going to have to replenish their their

 

17:16.969 --> 17:20.906

stocks and, you know, prepare for a world where, you know, potentially we could

 

17:20.906 --> 17:24.977

see a few more of these conflicts start to happen.

 

17:24.977 --> 17:29.214

So, you know, we are taking in our bets.

 

17:29.214 --> 17:33.652

We are, you know, putting in our hedges, but, you know, still riding the

 

17:33.652 --> 17:37.589

the upward trend in markets that we've seen

 

17:37.589 --> 17:40.659

since the ceasefire was announced.

 

17:40.692 --> 17:45.731

Just this moment, you'll hear a lot of discussion about this moment being a

 

17:45.731 --> 17:49.968

new catalyst maybe for investing in alternative energy.

 

17:49.968 --> 17:53.672

A lot of countries have already gone ahead and invested in that, but perhaps

 

17:53.672 --> 17:58.110

taking that up a notch and to get there faster

 

17:58.110 --> 18:02.114

in terms of other forms of energy so that oil exposure in

 

18:02.114 --> 18:06.652

future years is not as, makes them not less vulnerable.

 

18:06.652 --> 18:10.823

Does that make an interesting investment for you yet?

 

18:10.823 --> 18:14.326

I think it's a story we've been playing for a while, but I think, you know,

 

18:14.326 --> 18:18.630

rather than necessarily, because, you know, this is not no longer an

 

18:18.630 --> 18:22.534

environmental story. This is this is about economic security.

 

18:22.534 --> 18:27.306

So and it's not I think the issue is, yes, you want to diversify, diversify

 

18:27.306 --> 18:31.443

away from other countries, you know, being being in this space, but you

 

18:31.443 --> 18:33.712

also want to diversify the sources that you have.

 

18:33.712 --> 18:37.883

So, you know, for some, it's solar, a lot of countries have been rolling out

 

18:37.883 --> 18:42.321

nuclear. As a source as well here in Europe

 

18:42.321 --> 18:46.058

when it continues to be a pretty big source of energy.

 

18:46.058 --> 18:50.028

So that diversification is definitely going to continue, but again,

 

18:50.028 --> 18:53.132

it will very much vary in different parts of the world.

 

18:53.132 --> 18:57.402

Solar is, for a lot of the emerging market countries,

 

18:57.402 --> 18:59.271

Global South, that is the way to go.

 

18:59.271 --> 19:03.242

And it's actually a relatively small part of China's exports,

 

19:03.242 --> 19:04.977

but it's certainly going to help.

 

19:04.977 --> 19:09.114

Keep those export numbers up, given that most people will be saying, yeah, we

 

19:09.114 --> 19:11.517

kind of need what you have, China.

 

19:11.517 --> 19:14.953

Right and I mean the Middle East has been investing in that for a long time.

 

19:14.953 --> 19:18.924

They have a lot of sun but in any case

 

19:18.924 --> 19:22.728

if they can't get oil out in the way that they would like to in terms of export

 

19:22.728 --> 19:26.899

you just you just wonder if those transitions there as well are

 

19:26.899 --> 19:29.201

accelerated.

 

19:29.201 --> 19:32.337

Absolutely. I think that, you know, that is a trend that was there.

 

19:32.337 --> 19:36.975

This will have done nothing to put people off from continuing to do that.

 

19:36.975 --> 19:41.013

In terms of the bond story and the way that ultimately you make

 

19:41.013 --> 19:44.950

allocations across things, what do you do with the

 

19:44.950 --> 19:49.121

bond's story at this point? It hasn't cracked, hasn't had an

 

19:49.121 --> 19:52.491

awful time, but the correlations are hard to deny.

 

19:52.491 --> 19:54.960

What do you tell investors?

 

19:54.960 --> 19:57.429

Yeah, this is a difficult one, right?

 

19:57.429 --> 20:01.500

Because the diversification that you wanted just hasn't been there,

 

20:01.500 --> 20:04.469

the correlations have been pretty high.

 

20:04.469 --> 20:08.607

And I think this plays into sort of our longer term theme about what is

 

20:08.607 --> 20:11.877

it that the bonds can provide from here going forward?

 

20:11.877 --> 20:15.814

And really big picture theme is if you look at the trends in

 

20:15.814 --> 20:18.417

especially the developed part of the world.

 

20:18.417 --> 20:22.688

With deficits where they are the kind of payouts that people

 

20:22.688 --> 20:26.558

are going to have to make on the back of ageing societies, etc.

 

20:26.558 --> 20:31.430

It's not looking particularly good for yields in particular.

 

20:31.430 --> 20:35.667

And if you take the view that certainly I have, that we are probably in

 

20:35.667 --> 20:39.838

a sort of more inflationary world going forward, if nothing

 

20:39.838 --> 20:43.108

else, because people are gonna have to be manufacturing closer to homes that

 

20:43.108 --> 20:47.179

aren't gonna be as efficient going forward that that's all

 

20:47.179 --> 20:51.350

inflationary. So where we can, we are

 

20:51.350 --> 20:55.387

suggesting to investors a little bit of diversification into commodities

 

20:55.387 --> 20:59.491

is probably a good place to be, given that they tend to

 

20:59.491 --> 21:04.930

be assets that do well when inflation is a little higher.

 

21:04.930 --> 21:07.199

And again, it's been interesting so far this year.

 

21:07.199 --> 21:11.336

It was working really well, didn't do quite as well as we expected

 

21:11.336 --> 21:13.505

in the early days of the conflict.

 

21:13.505 --> 21:16.341

But I think we're seeing a return to that.

 

21:16.341 --> 21:20.445

And going forward so you know some commodity exposure is good within

 

21:20.445 --> 21:24.750

fixed income you probably want to be linkers and a little bit more

 

21:24.750 --> 21:28.854

than possible and again within fixed income you'd probably want to, be

 

21:28.854 --> 21:32.591

you know on the credit side of companies that probably benefit from the

 

21:32.591 --> 21:35.694

environment that we've just laid out.

 

21:35.694 --> 21:39.731

Can you can you break down the allocation that that you're managing at

 

21:39.731 --> 21:44.102

this point or or most recently they they're allowed to share with us

 

21:44.102 --> 21:48.140

Yeah, so we started off the year, you know, reasonably positive on equities.

 

21:48.173 --> 21:52.311

So we were about, you, know, plus 5% equities, we have been

 

21:52.311 --> 21:54.446

taking that down through throughout.

 

21:54.446 --> 21:57.783

So we're still just about holding on to our positive equity view.

 

21:57.783 --> 22:01.920

It's about plus one. But, you know, I think going forward from

 

22:01.920 --> 22:06.024

here, if we don't see a resolution in terms of ships going through,

 

22:06.024 --> 22:10.495

we'd probably want to be neutral and just sort of take it by month because

 

22:10.495 --> 22:14.766

I do think that markets are perhaps underestimating at this moment the impact

 

22:14.766 --> 22:18.704

of supply being so low

 

22:18.704 --> 22:21.039

from a very important part of the world.

 

22:21.039 --> 22:22.841

Okay, so that's the equity side of it.

 

22:22.841 --> 22:27.145

And then, and then in terms of you mentioned commodities, but but also bonds,

 

22:27.145 --> 22:30.716

where do you where do you sort of sit in terms

 

22:30.716 --> 22:34.219

Yeah, so credit for us is a little bit more problematic.

 

22:34.219 --> 22:37.656

I mean, spreads are very tight and continue to be that way.

 

22:37.656 --> 22:41.593

We still think there is more resilience in the high yield part

 

22:41.593 --> 22:45.597

of the markets. And on the GovE side of things, you really do have to be quite

 

22:45.597 --> 22:49.668

selective in terms of where you are and we like index

 

22:49.668 --> 22:54.473

linkers. That for us, is probably a part

 

22:54.473 --> 22:58.744

of the fixed income segment that continues to benefit.

 

22:58.744 --> 23:02.881

When we came out of COVID, there were a lot of discussions about the types

 

23:02.881 --> 23:07.486

of modelling, for instance, that had caused

 

23:07.486 --> 23:11.523

economic models in terms of supply side shocks

 

23:11.523 --> 23:13.525

and then demand side shocks.

 

23:13.525 --> 23:17.596

And we had a slightly out of sync level of the correct

 

23:17.596 --> 23:19.331

models to model what was going on.

 

23:19.331 --> 23:21.032

Is there something similar going on right now?

 

23:21.032 --> 23:23.235

I'm just going to ask you a little bit about your process.

 

23:23.235 --> 23:27.172

And AI and how it helps you ultimately with perhaps

 

23:27.172 --> 23:29.508

modelling and usefulness within your job?

 

23:29.508 --> 23:31.643

Are you using that more?

 

23:31.643 --> 23:34.112

Does it help?

 

23:34.112 --> 23:36.782

Am I using it more? Yes, yes, we are.

 

23:36.782 --> 23:39.551

So certainly, you know, that has been very useful.

 

23:39.551 --> 23:41.286

Is it a productivity boost?

 

23:41.286 --> 23:44.856

Yes potentially it is. It does make modelling a lot easier.

 

23:44.856 --> 23:48.860

But I don't think it's the be all and end all that the people think

 

23:48.860 --> 23:52.531

it is so far. And this kind of goes back to the point that we were making

 

23:52.531 --> 23:56.768

earlier that, you know, in order for many parts of

 

23:56.768 --> 24:01.039

the Western world in particular, you're gonna need that

 

24:01.072 --> 24:04.443

productivity boost from AI to really start to come through.

 

24:04.443 --> 24:08.180

And I think it will, it'll probably be a lot slower than most people

 

24:08.213 --> 24:13.051

anticipate. And it's interesting because if you look at all the surveys,

 

24:13.051 --> 24:17.055

it's mostly emerging markets and people within that that tend

 

24:17.055 --> 24:21.760

to be more enthusiastic about AI take-up.

 

24:21.760 --> 24:25.697

So, again, it's fascinating as you look at China and look at India,

 

24:25.697 --> 24:29.534

other countries. People a lot more excited about what AI will be able to do

 

24:29.534 --> 24:33.205

there than perhaps in this part of the world, which makes me think that, you

 

24:33.205 --> 24:37.242

know, perhaps that productivity boost that we're expecting might

 

24:37.242 --> 24:41.646

come in other parts of the world and not in places

 

24:41.646 --> 24:43.782

where you thought it might have the most impact.

 

24:43.782 --> 24:47.819

And that ties into part of your investment thesis based on

 

24:47.819 --> 24:50.155

that, or is that just sentiment at this point?

 

24:50.155 --> 24:52.657

I think it's just sentiment at this point.

 

24:52.657 --> 24:56.661

It's not something that we are looking at, but I think clearly

 

24:56.661 --> 24:58.897

AI is here to stay.

 

24:58.897 --> 25:02.701

I think we are still going to see the implications of how this actually works

 

25:02.701 --> 25:06.972

out. But certainly if you look at how

 

25:06.972 --> 25:11.009

many people are using it more, that's pretty much baked in

 

25:11.009 --> 25:14.579

now. I think most people you talk to in our organisation are pretty much using

 

25:14.579 --> 25:18.750

it every day. To some extent to help make things

 

25:18.750 --> 25:22.220

a little bit better. It means certainly my analysts are coming up with answers

 

25:22.220 --> 25:26.424

to all my questions a little quicker, which is no bad thing.

 

25:26.424 --> 25:32.364

But as with everything, asking the right questions is pretty important.

 

25:32.364 --> 25:36.568

So thankfully there's still something left in our jobs.

 

25:36.568 --> 25:37.936

So that's good. It's great.

 

25:37.936 --> 25:40.739

It's great to hear the global story from your perspective.

 

25:40.739 --> 25:44.743

You're in London, you're certainly meeting with investors around the world and

 

25:44.743 --> 25:46.545

considering their thoughts.

 

25:46.545 --> 25:49.180

I'm just wondering what you might like to leave investors with.

 

25:49.180 --> 25:52.350

I have a question about Canada and how it fits into the global story if it does

 

25:52.350 --> 25:56.321

at all, but yeah, what would you say global investors

 

25:56.321 --> 25:58.590

are interested in right now? You're sort of sharing this with Canadian

 

25:58.590 --> 26:00.859

investors right now.

 

26:00.859 --> 26:05.030

I mean, I think clearly we need to know how everything works out in

 

26:05.030 --> 26:07.399

this, you know, in this environment that we find ourselves.

 

26:07.399 --> 26:11.703

Certainly, it wasn't really on the cards, you know, January 2,

 

26:11.703 --> 26:15.140

when we started off this year. But, you know, I do think that this is actually

 

26:15.140 --> 26:19.411

quite important. I do think it affects most parts of the world,

 

26:19.411 --> 26:23.281

albeit at different levels.

 

26:23.281 --> 26:27.052

But finding a solution to this is going to be quite important, this is

 

26:27.052 --> 26:31.122

probably. Potentially one of the biggest shocks we've had to

 

26:31.122 --> 26:33.258

the economy since the 1970s.

 

26:33.258 --> 26:36.595

And then, you know, we've lived through COVID, we still just about remember

 

26:36.595 --> 26:40.532

that, you know the good news about COVID was that you had, you

 

26:40.532 --> 26:44.569

know a lot of governments that were prepared to respond and provide support.

 

26:44.569 --> 26:48.006

That is probably not going to be as widespread as we thought.

 

26:48.006 --> 26:50.675

So it is something that does affect all of us.

 

26:50.675 --> 26:53.511

And you know in that perhaps there is a bit more hope because...

 

26:53.511 --> 26:57.182

You can see people getting together and say, right, we do have to do something

 

26:57.182 --> 27:00.118

about this before it becomes a bigger problem.

 

27:00.118 --> 27:04.489

So not completely doom and gloom at the moment, but certainly

 

27:04.489 --> 27:06.825

being cautious is quite important.

 

27:06.825 --> 27:10.228

Yep, and there might be some great innovations that come out of crises, as

 

27:10.228 --> 27:11.930

those are.

 

27:11.930 --> 27:13.164

Absolutely.

 

27:13.164 --> 27:16.034

Veshak Bhar, joining us in London. Thank you very much for your time.

 

27:16.034 --> 27:17.936

We wish you very well. Have a great weekend.

 

27:17.936 --> 27:20.572

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