Investment Strategy Roundtable 2020

The COVID-19 induced financial crisis has caused an economic collapse in both supply and demand. In addition, it has also accelerated existing trends such as de-globalisation and trade tensions, while further exposing cracks in the socioeconomic fabric of the society.

A new investment playbook?

The aggressive actions by governments around the world, utilising the dual force of fiscal and monetary policies, have severely distorted the markets. Equity markets have generally retraced their losses from the 25-30% drop in March, despite a precarious economic situation illustrated by disastrous GDP and unemployment figures.

It reminds us of an old cliché: Don’t bet against the Fed!

This compounds the difficulties that investors face in constructing resilient portfolios for the long term. Perhaps a new playbook is required, superseding traditional portfolio construction strategies.

Discussion themes

In this investor roundtable co-hosted with Templeton Global Macro, we will examine the implications for portfolio investment strategy and risk management in this uncertain and volatile environment.

Investment implications of the changing global macro environment:

Supply and demand shocks
Fiscal and monetary stimulus
De-globalisation and dis-integration of global supply chains
Polarisation: Economic, social and political
Geopolitics: US vs China

Re-defining approaches to asset allocation in the new regime:

Distortion in equity-versus-bond correlations due to continued central bank interventions: How does diversification work?
Negative and zero-bound rates: Efficacy of bonds and duration-focused strategies?
Differentiated recovery modes across developed and emerging markets: Opportunities for idiosyncratic alpha?
Making sense of geopolitics in investment decision-making
Preparing for inflation surprise or deflationary shock?