Three big questions for multi-asset investors

Despite uncertainty around lockdown exits and economic recovery, the role of a fund manager is to explore hidden opportunities as well as protect capital. Sunil Krishnan discusses why investment-grade credit and European assets could fit the bill for multi-asset portfolios.

Nearly three months after COVID-19 caused markets to crash and sent countries across the globe into lockdown, debates continue over what the post-COVID world will look like and the extent of the long-term damage. Sunil Krishnan remains cautious.

In the latest instalment of our editorial series, Link, Aviva Investors experts discuss the prospects for financial markets and the world economy in the face of escalating hostilities between the US and China.

In the midst of the COVID-19 shock, Felix Mantz from Lincoln Pensions and Joachim Sudre from Aviva Investors explore how defined benefit pension schemes should plan their journey towards an end game and adopt a more holistic approach to risk.

Income investors face multiple challenges – dividend cuts, historically low yields, rising corporate defaults, and an uncertain property market. Francois de Bruin goes in search of sustainable income sources.

It is one thing to have a good investment idea, but quite another to extract the maximum potential from that idea and combine it with others to create an optimal portfolio. This is where portfolio construction comes in.

While the COVID-19 pandemic may be unlike anything financial markets have experienced before, the past still offers valuable lessons for investors trying to make sense of the crisis, explains Euan Munro.

The scale and speed of COVID-19’s impact on global financial markets has caused emerging market debt returns to decline at a pace not seen since the global financial crisis. However, history suggests the recovery of the asset class may also turn out to be quick.

In early February, with financial markets oblivious to medical experts’ warnings about the dangers posed by the coronavirus, Ian Pizer of Aviva Investors’ investment strategy team began to look into the medical research to learn more about the potential outcomes and the implications for the global economy and markets. What he discovered raises questions about financial market participants’ ability to react to issues they don’t fully understand.

Correlation patterns between assets have not been behaving conventionally over the last month. Most notably, there have been periods when US Treasury yields have been rising (and their value falling) at the same time as equities have been selling off. Why have investors been abandoning safe-haven assets in the midst of the steepest market falls we have seen for 40 years?

With the start of the consultation for proposed changes to the measurement of inflation in the UK, we look at the likely impact to asset classes, the assets most affected, and the key issues investors should be aware of.

In the latest of our editorial series, Link, AIQ brings members of Aviva Investors’ investment strategy, equity and debt teams together to discuss the prospects for financial markets and the world economy in the face of the coronavirus epidemic.