fund manager views

As Covid-19 sweeps across the globe, a recession looks unavoidable.

Investors are grappling with the huge uncertainty caused by the global Covid-19 pandemic. The human and economic impact has been dramatic, both in its magnitude and in its velocity.

The speed and scale of the market decline has been the defining feature of this market downturn, although this has been matched in unprecedented rapidity of response by both central banks and governments.

Following the unprecedented falls across all financial markets in recent weeks, the safest government bond markets have had to become cash vaults for fund allocators trying to raise the liquidity needed to plug the fast-growing holes left by the equity,...

At the time of writing, UK equity benchmarks have fallen by approximately one-third from their year-to-date highs.

After a torrid three weeks, financial markets stabilised in recent days in response to the stimulus packages announced both by central banks and governments.

The global spread of the coronavirus led to a simultaneous shock on both the supply and the demand side of the affected economies.

We cannot predict when markets will finally reach a bottom – they may already have – but we believe it is most likely to be once we hit a peak in the daily growth in new Covid-19 cases round the world.

Investors could be forgiven for thinking that nowhere is an immediately appealing prospect for investment right now, least of all Europe.

The disruption to the global economy from the worldwide spread of the coronavirus is the biggest shock to the world since the Second World War.