Asset Allocation Outlook April

Last month we were rather non-committal as to whether the spread of the coronavirus would cause a recession, but it’s now clear that it will. In the face of the publication of unprecedentedly weak economic data, the financial markets have in fact calmed down somewhat. This is mainly because the coronavirus appears to be spreading slightly less rapidly in China, South Korea and Europe, but also a result of the enormous monetary and fiscal stimulus packages that have been announced. In our investment policy we have slightly increased our allocation to US credits, while we continue to hold an underweight in equities.