Schroders: Wat is de impact van het coronavirus volgens de beleggingsspecialisten?

March 10, 2020

Het coronavirus vormt een bedreiging voor de financiële markten. Wat is de mening van de beleggers van Schroders over wat de verspreiding van het coronavirus voor hun specialisme betekent? Hieronder staat een aantal van hun meningen verkort en in het Engels weergegeven. In het artikel ‘Coronavirus: the views from our investors’ treft u er meer aan.

Global equities

Alex Tedder, Head and CIO of Global and US Equities:

‘On balance, for our global equity strategies, we remain somewhat hopeful that the impact on economic activity will be short-lived and the virus will serve to push out profits by a couple of quarters, rather than de-railing it entirely.

‘At best, earnings for the first quarter will be ‘messy’ and at worst extremely ugly, providing a source of ongoing volatility as expectations adjust. From a longer term perspective, any impact of the virus is unlikely to result in a material or permanent impairment of the intrinsic value or long-term growth trajectory of the companies we look at.

‘At current levels, we are more inclined to see this as an opportunity to add to positions selectively in some of the more heavily sold-off sectors and stocks, particularly those linked to travel and trade.’

Asian equities

Toby Hudson, Head of Asia ex Japan Equities:

 ‘Our base case today is that despite the tragic loss of life, this will not represent a structural change in the growth outlook for the Chinese nor regional economies, but more of a short, sharp cyclical slowdown that lasts a few months.

‘The economic impact is being felt most immediately in sectors linked to tourism, travel, offline entertainment and discretionary retailing, both in and outside China. More generally, the heightened uncertainty is likely to negatively impact consumer and business confidence, and, in turn, spending and investment decisions.

‘Given the rapidly changing expectations for the spread of the virus, it is impossible to model the hit to near term economic growth and corporate earnings, but clearly the impact will be very material in the first half of the year for many sectors. “In the near-term markets are likely to continue to trade based on the daily virus data. Aggregate valuations have pulled back closer to longer term averages; however, markets may well over-shoot on the downside given the limited visibility around the outlook, and a degree of ‘profit taking’ after earlier gains, is understandable. This may throw up interesting opportunities to add to our preferred names in the region.’

Eurozone equities

Martin Skanberg, Fund Manager:

‘Clearly, the quick reaction from the market has been to sell off cyclicals including financials and stocks sensitive to a weaker oil price. This includes some of the best capitalised businesses in the world today, which when coupled with low valuations makes them among the least risky for those willing to take a long-term view. Our concern is for those companies that are priced for perfection.

‘Markets have fallen by almost 10% since posting record highs in mid-February and whilst a reasonable amount of risk has now been factored in, we remain cautious in the near term and expect to see numerous profits shortfalls reported in April/May. But when the market sells off so aggressively, there can often be indiscriminate and irrational selling. This provides a buying opportunity in areas where we have confidence in a company’s earnings, such as our holdings in the defence sector.’

US small and mid cap equities

Bob Kaynor, Head of US Small and Mid Cap Equities:

‘We believe COVID-19 is going to impact the earnings growth prospects through the first half of 2020. While the ultimate magnitude of the impact remains uncertain, until we see clear containment (in the number of cases and geographies) market volatility will remain elevated until the risk can be appropriately priced. We expect the repricing of risk assets to have run its course by the end of the first quarter, even though the economic impact will continue to be felt through the second quarter. For the time being, we believe the step back in growth is transitory and not a fundamental challenge to the economic cycle.

‘At the time of writing, the stock market has just had its worst week since the 2008 financial crisis. COVID-19 is an untimely shock, but hitting at time when the US economy has been strong. While it is easy for investors to panic in this period of uncertainty (especially as it is not yet clear if the virus is transitory or fundamentally changing the cycle), times like these often create the greatest buying and return opportunities.’

Emerging market equities

Tom Wilson, Head of Emerging Market Equities:

‘The virus is becoming more widespread and increasingly hard to contain. The impact on global growth and the disruption to global supply chains is likely to be more pronounced and last longer than initially thought. Consequently, we have reviewed our portfolios for positions in which our longer-term conviction has been deteriorating with a view to allowing cash levels to increase modestly. We have not lifted cash materially, or meaningfully changed the shape of portfolios.’

Fixed income

Philippe Lespinard, Co-Head of Fixed Income:

‘Regarding government bonds, our overweight duration (sensitivity to interest rates) position has benefitted as sovereign bonds have rallied on a global scale following the move to safe-haven assets. Our overweight position in the US, which we have increased, captured these moves and performed particularly well.

‘From a credit perspective, so far we have seen the market asking for higher premiums to compensate for the unknown risks associated with the virus. Credit spreads have widened across the market, but particularly so in parts of the market where very little risk was already being priced in, such as in the high yield market. While the markets continue to appraise the impact from the virus on the global economy, we remain comfortable with the defensive position of our portfolios. 

‘Looking ahead, while the situation remains extremely fluid, we are confident that the systemic effect of the virus will eventually fade, and the periodic volatility that follows news headlines will create some further opportunities to identify issuers that have experienced relatively limited impact from the virus on their cash-flows.’

Private equity

Nils Rode, Chief Investment Officer, Schroder Adveq:

‘For existing private equity investments, the impact varies mainly by region and industry, the specific businessmodel of a company and its financing situation. While several private equity portfolio companies are likely be affected negatively, at least temporarily - and some could be affected more severely - many investments are well positioned to go through this situation without any permanent impairment. A few companies might even be able to benefit from the situation (for example, companies working on potential treatments).

‘Private equity is generally well positioned for surprising shocks such as the one created by the coronavirus. Private equity funds are well capitalised with locked-in capital that can either be deployed for new investments when opportunities arise, or that can be used to support existing portfolio companies if and when necessary.

‘Additionally, the long investment time horizon of private equity funds provides the industry with a high level of flexibility with regard to exit timing, which means that private equity managers and their investors can keep a calm mind even in turbulent times.’