Imperium Capital Publication

Viewpoint – May 2020

The world economy has entered its sharpest and deepest recession since the Great Depression almost 100 years ago, yet equities are in the midst of a raging bull market. By the end of May, global equities, as measured by the MSCI World index, had returned 35% from the market bottom on 23rd March, an exact mirror of the 35% decline between the bull market peak on 19th February and the March 23rd low. The pace of both the decline and subsequent recovery, including a further gain of almost 5% in developed world equity markets in May, is without precedent.

Global Matters Weekly – 11 May 2020

Size Matters
by James Klempster, CFA

There’s no two ways about it: size matters. We live in a society that admires big – The Angel of the North, the Great Wall – yet we also revere the precision of small – the microprocessor, automatic watches. When it comes to disadvantages, both large and small also can be found wanting. Needless to say, in the world of fund management things are equally nuanced.

Market Snapshot

  • Several countries ease lockdown restrictions from today
  • Risk assets continued to recover last week
  • Brent crude rallied 17.1% last week to $31.0 a barrel
  • Gold rose 0.1% to $1702.7 an ounce

Global Matters Weekly – 4 May 2020

Risks and opportunities in fixed income
by Andrew Hardy, CFA

Bonds, issued by both governments and corporates, will always have a significant role to play in multi-asset portfolios due to their inherent stability and reliable cash flows, which provide much needed balance for other riskier positions. However, recent developments spurred on by the COVID-19 crisis should prompt investors to consider deemphasising the focus on government bonds from this point and increasing allocations to corporate credit.

Market Snapshot

  • Positive trial results for COVID-19 treatment and vaccine boosts sentiment
  • European countries plan loosening of lockdown measures and partial reopening of economies
  • Brent crude rose 23.3%, ending the week at $26.4 a barrel
  • Gold fell 1.7% ending the week at $1700.4 an ounce