A post-pandemic world, when it eventually arrives, will not be a return to normality. It will be the beginning of a new era. Certainly, some pre-COVID behaviours will return, but the COVID experience has permanently changed behaviours and accelerated innovation and adoption. How the world reassembles will resolve a great number of the questions facing markets today. After several strong years of performance, equity markets in 2021 faced renewed concerns about inflation, rising rates and overall valuations, and these concerns will persist in 2022.


As always, macroeconomics dominates headlines, but the investment opportunities rest at the micro level of individual companies. Unprecedented demand for goods meeting a gap in infrastructure investment created a supply crunch, but we see signs that some of the supply chain issues such as semiconductor shortages and port congestion have peaked and should ease into next year. Investors cannot realistically claim to be able to see the next inflationary pressure, however. Forecasts around inflation and interest rates are not productive.

Digitisation and automation the key to higher productivity

A supply constrained labour force is likely in the post-pandemic world, reshaped by the ease of remote work, demographics, immigration policies and generational attitudes. The inflation from a tight labour market, where competition for a smaller workforce exerts upward pressure on wages, does not go away simply from more investment. The potential for further labour-related inflation will continue into next year, but on a longer time horizon, digitisation and automation will be key to driving higher productivity with a smaller workforce.

While we refrain from making predictions about interest rates, it is reasonable to believe that if the economic recovery and accompanying inflationary pressures remain on the same trajectory, we would expect to see an increase in interest rates. The strong equity market, with growth1 outpacing value2 for several years, reflected in part a low-rate environment. Investors are prepared to pay more for growth when rates are low. A reversal of that relationship, however, concerns markets. While the market has pockets of expensive stocks susceptible to an interest rate shock, we do not see widespread market excesses. Nor do we anticipate a rotation to value stocks if interest rates do rise. Traditional value sectors, such as financials and oil, may rally in the near term, but we still believe the market will prefer long-term sustainable growth.

The analogue-to-digital transformation

That pursuit of long-term, sustainable growth brings us to the more interesting micro-level discussion for 2022. Precise forecasts are foolish, but we can focus on the broad areas where we see ongoing change. The pandemic accelerated the analogue-to-digital transformation that will support growth in the digital economy for the coming decades. The shift is the foundation for the software and semiconductors that are the building blocks of the digital economy. We feel certain that the trend towards digitisation will continue into 2022.


The isolation of the pandemic and the rise of remote work supports the acceleration of the adoption of e-commerce, streaming services, digital payments and the accompanying need for cybersecurity. These trends will also drive greater penetration in sectors that so far have resisted the analogue-to-digital transformation. Financial services and health care could show an increasing pace of change and provide interesting investment opportunities.

Businesses must consider all constituents

Businesses will face hurdles post-COVID. COVID accelerated the challenges to physical retail and to legacy, on-premises technology. Businesses built around workers returning to offices will struggle. Business travel is likely impacted for some time, whereas the possibilities for longer term leisure travel have grown significantly as consumers leverage their abilities to work from anywhere. Broadly, we expect competitive barriers to entry to be even more dangerous to businesses. The digital economy lowers barriers for customers to move to new services and products. Trying to exploit a tight grip on a customer base becomes a riskier strategy in 2022 and beyond. Indeed, companies in 2022 must more than ever consider all constituents: employees, customers, suppliers, and society at large. They must demonstrate ‘non-zero-sumness’, a win-win concept where companies create more value than they take, and which defines the long-term path for a successful company.


In sum, the challenge for growth investors is not to predict rates or obsess over valuation. If rising rates reduce the value of growth, then our view is that investors should focus on where that growth is strongest and most enduring.


Our lens on the world – guided by the world’s unpredictability – does not rely on precise predictions of the future. As such it is ideally suited for an environment in which the global economy is transitioning from analogue to digital. We believe that companies exhibiting high levels of non-zero sumness and further enabling the multi-decade transition from analogue to digital will be set up for success, regardless of the upcoming economic environment. Furthermore, such companies will also maximize long-term outcomes for investors.

Businesses must consider all constituents

Denver-based NZS Capital manages more than $1 billion in assets and focuses on innovative companies that create more value for all their constituents – including investors, employees, vendors, the communities they operate in and the planet as a whole – than they take for themselves. NZS Capital has a strategic partnership with Jupiter Asset Management.

1 A growth stock is any share in a company that is anticipated to grow at a rate significantly above the average growth for the market.
2 A value stock refers to shares of a company that appears to trade at a lower price relative to its fundamentals, such as dividends, earnings, or cash flow.

The value of active minds: independent thinking


A key feature of Jupiter’s investment approach is that we eschew the adoption of a house view, instead preferring to allow our specialist fund managers to formulate their own opinions on their asset class. As a result, it should be noted that any views expressed – including on matters relating to environmental, social and governance considerations – are those of the author(s), and may differ from views held by other Jupiter investment professionals.

Important Information

This document is for informational purposes only and is not investment advice. We recommend you discuss any investment decisions with a financial adviser, particularly if you are unsure whether an investment is suitable. Jupiter is unable to provide investment advice. Past performance is no guide to the future. Market and exchange rate movements can cause the value of an investment to fall as well as rise, and you may get back less than originally invested. The views expressed are those of the authors at the time of writing are not necessarily those of Jupiter as a whole and may be subject to change. This is particularly true during periods of rapidly changing market circumstances. For definitions please see the glossary at jupiteram.com. Every effort is made to ensure the accuracy of any information provided but no assurances or warranties are given. Company examples are for illustrative purposes only and not a recommendation to buy or sell. Issued in the UK by Jupiter Asset Management Limited (JAM), registered address: The Zig Zag Building, 70 Victoria Street, London, SW1E 6SQ is authorised and regulated by the Financial Conduct Authority. Issued in the EU by Jupiter Asset Management International S.A. (JAMI), registered address: 5, Rue Heienhaff, Senningerberg L-1736, Luxembourg which is authorised and regulated by the Commission de Surveillance du Secteur Financier. For investors in Hong Kong: Issued by Jupiter Asset Management (Hong Kong) Limited (JAM HK) and has not been reviewed by the Securities and Futures Commission. No part of this document may be reproduced in any manner without the prior permission of JAM/JAMI/JAM HK. 28325