Coronavirus in Context Banner

Coronavirus in Context

April 2020

We look past the headlines to provide investors perspective on the coronavirus’ impact on economies and asset classes.

Coronavirus April Update:

Our Latest Asset Class Views

As the Covid-19 pandemic continues to unfold, our investment teams are closely monitoring the impact on each asset class and following developments in all regions. We believe taking a longer-term view, remaining vigilant about risks, and seeking selective opportunities will help position portfolios to weather the crisis.


By: Paul Hsaio, Economist, Hong Kong

China: A Gradual Recovery Underway

The coronavirus outbreak presented a significant exogenous shock to China’s economy, yet we are seeing some signs of a tentative recovery forming.

By: Markus Schomer, CFA, Economist, New York

Epic Surge in US Jobless Claims Offers First Glimpse of What's to Come

As economic indicators start coming out in the next few months, it's worth reminding ourselves that none of this is really a surprise, and much is already largely priced in.

By: Markus Schomer, CFA, Economist, New York

Macro Views: 10 Areas for Investors to Watch This Week

Global central bank and fiscal policy moves, jobless claims in the US, and consumer confidence readings in Europe are some of the areas we’re monitoring this week as the COVID-19 crisis continues.

By: Paul Hsaio, Economist, Hong Kong

Fed’s 'Shock and Awe' Puts the Ball in the Fiscal Court

We expect the trajectory of the virus and its impact on macroeconomic fundamentals to be the top-of-mind for policymakers around the world.

By: Paul Hsaio, Economist, Hong Kong

Asia Macro: As Central Banks Step on the Gas, It’s Time to Put Fiscal Policy in the Driver’s Seat

While the coronavirus poses significant headwinds to the Asian economy, we’re encouraged by swift policy responses and remain optimistic about longer-term growth trends.


Investment Strategy Insights

We Can't Go Home Again

We’re unlikely to return to the way things were before this crisis, so the best course is to consider our next steps carefully. Once coronavirus infection rates peak and we can see a time frame for lifting containment measures, it will be easier to focus on the shape and pace of recovery.

By: Hani Redha, CAIA, Portfolio Manager, Global Multi-Asset, London

Multi-Asset Views: Bright Spots in the Distance?

Our focus is on balancing the need to protect portfolios against downside risk with remaining flexible and open to adding risk when opportunities present themselves.

Fixed Income:

Fixed Income Asset Allocation Insights

Practicing Patience As Spreads Widen Dramatically

Valuations are becoming very attractive, and buying opportunities are starting to present themselves. While higher-spread segments look compelling, we continue to bide our time as liquidity issues persist.

By: Securitized Products Portfolio Managers Gunter Seeger, Andrew Budres, and Henry Huang

What’s Ahead for Securitized Markets Amid the Covid-19 Crisis?

We look at the impact of the coronavirus crisis on the CMBS, MBS, and ABS markets, including potential pain points and areas that should prove resilient.

Leveraged Finance Asset Allocation Insights

As Crisis Continues, Opportunities Emerge

As markets continue to grapple with the economic, social, and public health ramifications of the COVID-19 crisis, we believe more patient positioning is prudent overall. However, recent spread widening and the current valuation reset in credit are creating what we believe are very attractive opportunities in the high yield and bank loan arenas.

By: Steve Cook, Co-Head of Emerging Markets Fixed Income, London and Jonathan Davis, Client Portfolio Manager, Emerging Markets Fixed Income, New York

Emerging Market Debt: Risks and Resilience Amid the Pandemic

While market pricing reflects worst-case assumptions, a closer look at emerging market debt reveals supportive trends from both a health and an economic perspective – and these should give investors confidence about identifying opportunities amid the selloff.

By: Steve Cook, Co-Head of Emerging Markets Fixed Income, London and Jonathan Davis, Client Portfolio Manager, Emerging Markets Fixed Income, New York

Emerging Market Debt: Disciplined Investment in Times of Crisis

During periods of market volatility, it is our experience in such moments which is ever more important, we rely on our investment process that has been tested across multiple market cycles.

By: Steven Oh, CFA, Global Head of Credit and Fixed Income, Los Angeles

The Fed’s Rate Cut May Have a Limited Impact, But Sends a Strong Message

The Federal Reserve’s emergency rate cut acknowledged material concerns about the coronavirus’ potential economic and financial market impact. The question is, will the cut be effective and have the intended result?

By: Arthur Lau, Co-Head of EM Fixed Income, Head of Asia ex Japan Fixed Income, Hong Kong

Policy Measures Support Asian Debt amid Global Coronavirus Spread and Oil Crash

With the exaggerated pressure on government bond yields, high-quality bonds with attractive yield pick-up, such as Asian credits, will continue to see strong demand amid rising global recessionary risk.


By: Anik Sen, Global Head of Equities, New York

Equities Are Responding Well to Tail-Risk Removal in the Covid-19 Crisis

Lessons from the financial crisis are informing Covid-19 policy – and equity markets are responding as policymakers act quickly, work together, and go big to reduce tail risks.

By: Siddhartha Singh, Investment Director, Asia Equities, Hong Kong

Indian Equity Market: Navigating With Prudence and Simplicity

An unconstrained approach to Indian equities offers the flexibility needed to navigate turbulent markets.

By: Siddhartha Singh, Investment Director, Asia Equities, Hong Kong

Silver Linings: What We Are Seeing on the Ground in Asia

Being fully cognizant that the recovery will be contingent on containment of the virus followed by its cure, we would like to highlight some bright spots emerging from Asia.