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COVID-19: Defending against market slumps

| Investment | By Caroline Shaw

Yesterday, global markets fell on increased fears of a coronavirus (Covid-19) global pandemic. 

This is a difficult time as authorities wrestle with containment and pressures on local healthcare provision amidst rising cases outside China. The high number of cases in Italy bring major concerns that the coronavirus will spread quickly across Europe.

We continue to monitor global markets. Courtiers multi-asset funds remain very well diversified across both geographies and asset classes. We were cautiously positioned using call options for a significant part of our equity exposure and these were defensive yesterday. While Courtiers funds fell in value during the day, they out-performed the wider markets. 

The FTSE 100 index fell -3.3%, its biggest one-day fall in more than 4 years. US equities experienced a similar decline. The FTSE MIB index of the largest Italian companies dropped -5.4%. It was a bad day for airlines.  IAG, owner of British Airways, lost more than 9% of its value and the smaller airlines fared even less well with Ryanair and Easyjet collapsing -13.4% and -16.7% respectively. The Vix index, a measure of global stock market volatility, surged 47% in a single day.

The Courtiers Total Return Cautious Risk Fund was defensive, given the equity market protection in place and its exposure to other asset classes. It returned -1.7% during the day. The Courtiers Total Return Balanced Risk Fund, with slightly more exposure to global equities, returned -2.4% and the Courtiers Total Return Growth Fund, fully invested in the global equity markets, returned -3.2%.  

We are pleased that our defensive positions were helpful in defending against current concerns surrounding the Coronavirus. We’ll keep monitoring both the markets and the news, whilst looking for investment opportunities amidst the volatility.

Caroline Shaw CFA, MEng (Hons), Dip PFS, IMC, Chartered MCSI

Head of Fund & Asset Management

Issued by Courtiers Asset Management Limited, CAM0220349. Courtiers Asset Management Limited is Authorised and Regulated by the Financial Conduct Authority - Register No: 616322.

Warning – the views expressed by Courtiers in this summary and any video and video transcripts, are reached from our own research. Courtiers cannot accept responsibility for any decisions taken as a result of reading this document, watching the featured video or reading the video transcript and investors are recommended to take independent professional advice before effecting transactions. The price of stocks, shares and funds, and the income from them, may fall as well as rise. Past performance is not necessarily a guide to future returns.

We do not endorse nor accept responsibility for the content of any website not operated by Courtiers which you may visit by following a link from this article.

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