The year 2020 saw global financial markets being severely hit by Brexit negotiations, the US presidency elections and most of all, the COVID-19 pandemic. Funds positioning and asset allocation are adaptively being reshaped, influencing investment decisions.
BOV Asset Management recently hosted a webinar titled ‘Managing funds in these COVID times’, during which investment specialists shared insights on investment-grade bonds, international equities, the Maltese markets and what one can expect in the foreseeable future.
The discussion was launched by Steve Ellul, head at BOV Asset Management, who claimed that the COVID-19 pandemic not only disrupted global economies but it also impacted the way people invest.
Avoid majorly impacted sectors
“Strategically, when developing portfolio funds, Bank of Valletta’s approach is to seek different markets and diversify in long duration bonds,” Ellul said.
He recommended that risk-averse investors should avoid majorly impacted sectors and instead take into account qualitative factors such as management performance and sustainability.
Monetary politics drove bond yields into new lows, according to Adrian Borg, portfolio manager at BOV Asset Management.
“We recall a time when German bonds use to leverage a return of three per cent interest upon investment, whereas nowadays this has decreased to lower than one per cent,” Borg explained.
He foresees that companies will continue to issue bonds to grow their capital and compensate for the depreciation of their assets.
Portfolio managers Clayton Scicluna and Christian Buhagiar elaborated on both local and global investment situations. They stated that while Maltese government bonds are currently stable, the Brexit negotiations and the US presidency elections globally posed risk on investments.
Trade between countries is still being conducted, but at a lower scale; in fact, economists continue to forecast a global economic reduction of 3.5 per cent. The speakers concluded that the shifts in consumer behaviours and business operations, such as the increase in remote workers, will ultimately transform the way people invest their funds.
A recording of this webinar can be viewed on the BOV YouTube channel at https://youtu.be/hvTqHFM9UNo.