Loading

Will we wake up in a new world after Covid-19? Update 17-06-2020

Door is slowly opening

Quarantine is bringing the virus under control: infections have peaked in Europe and the US.

Each country is relaxing lockdown measures at its own pace.

Risk of a second wave of cases remains high as long as there is no vaccine. We expect there to be one by the end of 2021 at the earliest.

Economic impact is enormous

Many countries' national income in the second quarter will be more than 20% lower than last year. The decline in corporate earnings will be even greater.

Easing lockdown measures will lead to a sharp recovery, but we won't return to the pre-Covid situation anytime soon. Figures from China and South Korea show that, without vaccines and medicines, consumers remain wary. In many sectors such as aviation, tourism and hospitality, the impact is permanent and costing jobs.

Investment strategy remains one of caution

Markets are reacting enthusiastically to the restart of the economy. Nevertheless, we are remaining cautious and investing slightly less in shares.

We prefer sectors such as medical technology, e-commerce, media and software that support life with Covid-19. We have a preference for the US as the companies in those sectors are mainly active there.

Secure government bonds and cash complete the portfolio.

Besides this long-term vision, protection and trends on the financial markets are important aspects too. Your personal investment, which you can see in KBC Mobile and Touch, may have a different composition that takes account of your comfort zone.

Senior Investment Strategist KBC Asset Management

Markets are reacting enthusiastically to the restart of the economy. As quite a few risks remain, we are investing slightly less in shares.

Editing ended on 17 June 2020. This document is a publication of KBC Asset Management NV (KBC AM). The information in it can be changed without notice and offers no guarantee for the future. Nothing in this document may be reproduced without the prior, express, written consent of KBC AM. This information is governed by the laws of Belgium and is subject to the exclusive jurisdiction of its courts.