Absolute returns: asset allocation during extraordinary times
In this live-recorded webinar, STANLIB’s Head of Absolute Returns, Marius Oberholzer, provides an insightful update on challenges faced by financial markets in light of the coronavirus pandemic. Marius provides an outline of the STANLIB team’s current asset allocation views and how the team is positioning portfolios to weather the storm. He also identified potential risks and opportunities.
- COVID-19 driving opposing forces. A healthcare crisis vs economic crisis which could potentially lead to a financial markets crisis. As we navigate through an uncertain environment, reaction functions have been big/they will continue to be as opposing forces wrestle.
- Informing our views: The Absolute Returns team continues to adopt a framework to inform our asset allocation views with a lens on economics, valuations, momentum, sentiment, volatility and liquidity.
- While COVID-19 news flow continues to drive markets, the fact that “oil sprung a leak” has resulted in significant shifts in market dynamics.
- Exposure to risk was significantly reduced in February – being nimble and adapting to fast changing environment is key.
- Bearing in mind the opposing forces, attractive asset allocation views are based on liquidity support for corporate bonds (IG and HY) in US, and current SA bond yields.
As referenced in the webinar, the articles below contain additional insights from Marius and the Absolute Returns team related to the impact of the COVID-19 pandemic, as well as their approach during these extraordinary times.