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Global Matters - Weekly

 

Spaghetti Western

 Lorenzo La Posta, CFA - 03 August 2020

“Year 1862: amid the chaos of the American Civil War, the three gunslingers Blondie, Angel Eyes and Tuco (a.k.a. the Good, the Bad and the Ugly) are competing to put their hands on a buried cache of gold, but onl– “…wait! I got it wrong. It was something like: “Year 2020: amid the chaos of a global pandemic, some industries thrive (the Good) as others go through a rough patch (the Bad), while countries, economies and societies strive to recover from their wounds (the Ugly)”. This year, the outcomes have been more extreme than most Hollywood creations. Let’s just hope there will be no sequel to this tragic period.

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How flow can you go?

 Alex Harvey, CFA - 27 July 2020

After a bumper few months for equity markets, a recent report from Calastone, the global funds network, showed June was one of the worst months on record for outflows from UK equity funds.  That follows positive UK market performance for each of April, May and June.  The selling was broad based with even passive funds showing a rare negative flow print, so why the rush for the door and are investors cashing in their UK equity chips too early?

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2020 – a rollercoaster ride

James Klempster, CFA - 20 July 2020

How to sum up 2020 so far?  A rollercoaster is probably the best way to describe it; both from an emotional perspective but also in terms of what the markets have been up to. Over the first quarter, market participants went from being blissfully ignorant to a state of panic as the significance of global lockdowns became apparent and investors were left wondering what the crisis would mean for the economy and companies; not to mention the humanitarian cost.   

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Socially (Un)Acceptable

Michael Clough - 13 July 2020

The inexorable growth of environmental, social and governance (ESG) awareness has been impossible to ignore. Social criteria can be difficult to measure and they don’t necessarily lend themselves to quantitative metrics that environmental and governance matters might. Whilst simple screens may highlight certain ESG risks at a company. Critics have said the coronavirus pandemic and resulting economic implications might push ESG discussions down the agenda once again with strong balance sheets and profits trumping attractive ESG scores. That certainly doesn’t look to be the case.

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Lessons from Japan

Richard Stutley, CFA - 06 July 2020

The summer solstice, or ‘longest day of the year’, took place in the northern hemisphere just over two weeks ago, putting those of us that live here on a path of gradually shortening days towards winter. It’s not all bad news: July and August are typically the warmest months in the UK, but after that temperatures will also steadily decline. It remains to be seen whether, like other airborne viruses, COVID-19 is more infectious in winter, leading to a fresh spike in cases, but in any event we think the world is significantly better prepared for new waves and hence the impact should be smaller. Therefore, while acknowledging this risk to markets, it has not persuaded us to de-risk the portfolios further.

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