Cover story
4 / 5
[ CORONAVIRUS ]
Hannah Smith finds out how the post-coronavirus investment
landscape will differ from how it looked before
When the dust settles
As the Covid-19 pandemic
passes its peak,
governments the world over
are focusing their efforts
on how to reopen their economies for
business. For investors, however, things
may never be the same again. In the
same way that we are trying to adjust
to new social norms and methods
of working, investors will have to
reconsider their strategies in light of a
changing landscape for business.
Perhaps the most striking aspect of
this crisis is that we thought we had
already seen the end of quantitative
easing as the Great Experiment
wound up, a decade after the global
financial crisis. But central banks
have turned on the taps once more,
even using helicopter money in an
attempt to buoy economies shocked
by the pandemic, and no one knows
what the long-term impact will be.
In the UK, interest rates have
slumped to a record low of 0.1 per
cent and are likely to remain there
for the foreseeable future. Julian
Chillingworth, chief investment officer
at Rathbones, says the companies that
will do well in this environment are
those with good cash flow, a robust
business model and low leverage,
adding “they will continue to trade at
a premium to the rest of market”. Of
these, technology companies stand
out, so he suggests investors should
make sure they have an allocation to
this area of the market.
The companies that will do
well in this environment are
those with good cash flow, a
robust business model and
low leverage
TRUSTNET
trustnet.com