Wells Fargo Investment Institute: The Future of Globalization

New report analyzes the trends of investing in an interconnected world

Wells Fargo Investment Institute (WFII) today released a new thematic report, “The Future of Globalization – Investing in an Interconnected World.” Over the next decade, WFII expects that innovative technologies will continue to forge even greater global connectedness, but that new investment opportunities will emerge with the changing composition of trade and its destinations. The report addresses the nature of globalization, the evolution of trade in consumer goods and services, increased information and innovation, the demographic impact on trade, and emerging risks and subsidiary trends. The report also outlines ways in which geopolitical tensions and protectionist trade policies will influence the mix between domestic and international portfolio allocations.

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(Graphic: Wells Fargo)

“The familiar pattern of extended supply chains fragmented across multiple low-wage production centers appears to be evolving towards more concentrated, high-tech, and regional trade,” said Paul Christopher, head of Global Market Strategy for WFII. “We believe the reshaping of global trade will present broader and persistent opportunities in traded services and new technologies, but that supply chains will be shorter and focused around Asia and the U.S.”

The report addresses key questions for investors to consider:

• How may globalization evolve and create opportunities for investors?
• Which economic and geopolitical forces may shape future globalization?
• How may technological innovation help drive these trends?
• What risks may impede globalization and which investments may benefit?

The report also outlines three international trends that can help investors as they prepare to reposition their portfolios over the next decade:

• Globalization favors the U.S. and parts of developing Asia over other regions of the world
• Certain sectors should benefit from expanding automation and services trade
• Centrifugal forces will remain, but investors have potential hedges

WFII strategists favor a larger exposure to the U.S. than international markets and international exposure that favors emerging markets across China, India, and Southeast Asia.

Download the report “The Future of Globalization,” and read “The Big Rethink: Globalization in the Age of the Coronavirus” on Wells Fargo Stories.

Risk Disclosures

Global Investment Strategy (GIS) is a division of Wells Fargo Investment Institute, Inc. (WFII). WFII is a registered investment adviser and wholly owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company.

The information in this report is for general information purposes only and is not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally.

The information contained herein constitutes general information and is not directed to, designed for, or individually tailored to, any particular investor or potential investor. This report is not intended to be a client-specific suitability or best interest analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities. Do not use this report as the sole basis for investment decisions. Do not select an asset class or investment product based on performance alone. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs and investment time horizon.

Wells Fargo Wealth and Investment Management, a division within the Wells Fargo & Company enterprise, provides financial products and services through bank and brokerage affiliates of Wells Fargo & Company. Brokerage products and services offered through Wells Fargo Clearing Services, LLC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company. Bank products are offered through Wells Fargo Bank, N.A.

Risk considerations

Different investments offer different levels of potential return and market risk. The level of risk associated with a particular investment or asset class generally correlates with the level of return the investment or asset class might achieve. Stock markets, especially foreign markets, are volatile. Stock values may fluctuate in response to general economic and market conditions, the prospects of individual companies, and industry sectors. Foreign investing has additional risks including those associated with currency fluctuation, political and economic instability, and different accounting standards. These risks are heightened in emerging markets. These risks are heightened in emerging markets. Sector investing can be more volatile than investments that are broadly diversified over numerous sectors of the economy and will increase a portfolio’s vulnerability to any single economic, political, or regulatory development affecting the sector. This can result in greater price volatility.

About Wells Fargo

Wells Fargo & Company (NYSE: WFC) is a leading financial services company that has approximately $1.9 trillion in assets, proudly serves one in three U.S. households and more than 10% of small businesses in the U.S., and is the leading middle market banking provider in the U.S. We provide a diversified set of banking, investment and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth & Investment Management. Wells Fargo ranked No. 37 on Fortune’s 2021 rankings of America’s largest corporations. In the communities we serve, the company focuses its social impact on building a sustainable, inclusive future for all by supporting housing affordability, small business growth, financial health, and a low-carbon economy. News, insights, and perspectives from Wells Fargo are also available at Wells Fargo Stories.

Additional information may be found at www.wellsfargo.com | Twitter: @WellsFargo.

About the Wells Fargo Investment Institute

Wells Fargo Investment Institute is a registered investment adviser and wholly owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company, providing investment research, strategy, manager research, and thought leadership within the Wealth & Investment Management division, with the goal of supplying world-class advice to the company’s financial and wealth advisers.

News Release Category: WF-ERS

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