Covid-19 continues to challenge economic recovery Update 14-10-2020

Rising number of infections but no new lockdowns

Covid-19 has still to be brought under control. Indeed, the number of people infected is increasing worldwide again.

Policymakers no longer favour general lockdowns as their economic impact is too far-reaching. They are now opting for local quarantines and social distancing.

Economy is slowly crawling out of the trough

After the sharp rally following the reopening of the economy, the economic recovery has slowed down somewhat.

Companies are showing optimism, but consumers still feel hampered in their mobility, and doubts about job security are growing.

The smooth recovery in China indicates that the crisis can be overcome, with the help of the necessary government support.

Our investment strategy balances the risks more

The trend on the financial markets is positive. So positive in fact that it appears to be excessive in some segments and that certain risks, such as the approaching Brexit deadline and upcoming US presidential elections, are being overlooked.

We are therefore continuing to hold a balanced investment portfolio in which we combine a number of more defensive accents with more growth-oriented trends, such as medical technology and digitalisation.

In the bond component, we are looking for returns by investing in corporate bonds and in government paper from southern euro-area countries. Nevertheless, we are also building in some security with long-term German government bonds.

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.

Tom Mermuys, Senior Investment Strategist KBC Asset Management
We are benefiting from the favourable trend on the financial markets, while attempting to avoid exaggerated valuations. We are slightly more cautious when it comes to shares from popular growth sectors.

Editing ended on 14 October 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.