At the start of the summer, when lockdowns were gradually lifted, some hoped that the Covid-19 pandemic would recede during the hotter summer months. However, even though record temperatures were registered in August, the virus has unfortunately continued to spread. There have now been over 25 million cases globally, up from 10 million at the start of July.
Even though the number of new daily cases in the US has started to decline, some regions- including Europe-are now facing a second wave. So far, better testing and tracing capacity has allowed European policymakers to treat this second wave with targeted measures, including travel restrictions or the requirement to wear a face mask in public, instead of national lockdowns.
On the economic front, high-frequency data, such as travel and navigation app usage, point to continued global growth over the third quarter, albeit at a more moderate pace, particularly in the US, than in May and June. However, these challenges haven’t dented investors’ enthusiasm, which seems to have been lifted by a better-than-expected second-quarter earnings season and by the potential for a viable Covid-19 vaccine in the coming months.
In this context, risk assets continued to rally. Over the month, the MSCI Emerging Markets Index rose by 2.2% and the MSCI Developed Market Index rose by 6.7%. Credit also rallied, while global government bonds fell by 0.2% over the month.
Long Only Funds
| Rank | Company | Fund Name | August ’20 | YTD | CAGR | 3 Years | AUM (Million $) |
|---|
(Criteria used: Track Record > 1 Year, Currency: $US dollar, AUM > $100m)
ETFs
| Rank | Company | Fund Name | August ’20 | YTD | CAGR | 3 Years | AUM (Million $) |
|---|
(Criteria used: Track Record > 1 Year, Currency: $US dollar, AUM > $100m)
UCITS Funds
| Rank | Company | Fund Name | August ’20 | YTD | CAGR | 3 Years | AUM (Million $) |
|---|
(Criteria used: Track Record > 1 Year, Currency: $US dollar, AUM > $100m)
Fund of Funds
| Rank | Company | Fund Name | August ’20 | YTD | CAGR | 3 Years | AUM (Million $) |
|---|
(Criteria used: Track Record > 1 Year, Currency: $US dollar, AUM > $100m)
The swift and sizeable Covid-19 policy response from central banks and governments has managed to cushion the economic shock and lift markets, as policymakers aimed to build a bridge to the other side of the virus. However, the second wave in Europe reminds us that the battle is far from over and until a vaccine is widely available, economies will likely remain constrained by measures aimed at slowing the spread of the virus. It is therefore important that governments continue to support consumer incomes and businesses until a vaccine is available or until the virus is brought under control by other means. The extent to which they do so will be key to the outlook from here.
Given the high degree of uncertainty around the outlook for the virus and a vaccine, we continue to believe it makes sense to aim for balanced and well-diversified portfolios while considering which areas one might want to add to were a vaccine to be announced. In this environment, we favour an up-in-quality approach across both stocks and bonds, along with a focus on valuations relative to fundamentals. Alternatives, such as macro strategies, may also help diversify portfolios given the reduced diversification that government bonds are likely to provide at current yields. (source)
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Data provided by Morningstar. Care has been taken to ensure that the information is correct, but Edgefolio neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.