When the COVID-19 crisis hit financial markets, we decided to hold more frequent Investment meetings and provide you with regular updates on our thoughts and discussions from a portfolio perspective.
"); document.write("The key question we asked ourselves during these meetings was: when is the right time to take a more positive tilt towards risk assets given the material market pull-back we have experienced? When we assessed our Dynamic Asset Allocation (DAA) models, it was clear that valuations across most risk assets had improved materially over recent months. The biggest unknown was to what extent the market had priced in the impact on company earnings.
"); document.write("In terms of policy, liquidity conditions improved over the month as central banks and governments reacted quickly via monetary and fiscal backstop initiatives. Most notable was the US Federal Reserve's decision to extend their bond purchasing program to investment grade credit, which significantly improved liquidity conditions in global credit markets. From a cyclical perspective, our expectation is that economic news will be negative as it tends to be lagging in nature, and from an overall sentiment/risk perspective our indicators showed an improvement (decline in risk), although risk indicators such as the VIX remain at elevated levels.
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