Equity markets have rallied for much of 2021 on the back of improving economic data and encouraging vaccine rollout. Most indices we follow are up in double digits, with global equities (‘MSCI World Index) generating a total return of +14.3 per cent in euro terms (up to June 11). There has also been a change in market leadership as expected, with global value stocks (total return of +18.8 per cent) comfortably outperforming global growth stocks (+9.7 per cent) so far during 2021. Talk of deflation, falling bond yields and lacklustre economic growth, that has prevailed for more than a decade, has now shifted to talk of inflation moving above central bank targets and how this could potentially impact monetary policy. As we have noted in the past, a backdrop of strong synchronised global economic growth, loose fiscal and monetary policy, rising commodity prices and higher inflation are generally supportive for the value segment of the equity market. We look at two themes that have dominated year-to-date: (1) COVID-19 and (2) Inflation. Today, investors seem to be less concerned about COVID-19, as case growth in developed economies has significantly declined. The vaccine deployment...