The Biggest Balance Sheets​​​​

Central bank balance sheet expansion has had huge effects on economies and markets. Will they swell or decline in coming years and what does that mean for investors?​​
Massive Monetary Expansion Supporting Valuations​​​​​​​​

  • The balance sheets of the major developed central banks in the United States, European Union, Japan and England have swelled an unprecedented $8 trillion over the past year. This dramatic flood of money makes the $2 trillion expansion during the 2008 Global Financial Crisis look paltry.

  • While we believe multiple factors have driven equity P/E expansion, central bank balance sheet growth and its impact on liquidity and interest rates has played a significant role, in our view.

  • Fortunately for investors, central banks do not appear likely to tighten anytime soon, with Evercore ISI expecting a nearly $3 trillion expansion in global central bank balance sheets over the next year. We believe keeping the spigot of liquidity on should help support equity valuations.

The MSCI World Index is a market cap weighted stock market index of 1,603 stocks from companies throughout the world.

The following positions represented percentages of assets under management as of 9/30/20: Evercore, Inc., 0%.

The views expressed are the views of Fred Alger Management, LLC (“FAM”) and its affiliates as of January 2021. These views are subject to change at any time and may not represent the views of all portfolio management teams. These views should not be interpreted as a guarantee of the future performance of the markets, any security or any funds managed by FAM. These views are not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities. Holdings and sector allocations are subject to change.

This material must be accompanied by the most recent fund fact sheet(s) if used in connection with the sale of mutual fund shares.

Risk Disclosure: Investing in the stock market involves certain risks, including the potential loss of principal. Growth stocks may be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings and may be more sensitive to market, political, and economic developments.​​

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