COVID-19 update: Impact on Sovereign Investors

The Coronavirus spread has proven to be more unpredictable and less linear than one would have hoped at the onset of the pandemic. We continue to monitor existing and future mutations as a signpost for potential trouble ahead for the overall rather optimistic sentiment that has developed in global markets since the earlier-than-expected approval of effective vaccines.

We believe when triggering portfolio actions, it’s important to consider the following:

• the spread of the virus and the gradual re-opening process,
• vaccination rates and distribution,
• the policy response and affect of interest rates on monetary and fiscal stimulus,
• and the opportunities available to sovereign investors in global bond markets.

The time is now for investors to adapt to lower expected returns across asset classes and the growing importance of sustainable investing, both of which are altering the investment landscape.