Market and coronavirus update – 12 March 2020

By
Andrew Clifford,
User

Andrew co-founded Platinum in 1994 as the Deputy Chief Investment Officer, having worked alongside Kerr for several years at Bankers Trust and perfecting the craft of.. More

12 Mar 2020

The current situation is dynamic; markets are responding to a reduction in economic activity brought about by governments, corporates and individuals’ responses to the coronavirus threat. It is highly likely we are already in a recession.

The virus will continue to spread, slowed by any containment measures, until we find and deploy an anti-viral or vaccine.  There are promising anti-virals in trial indicating this may be a matter of weeks rather than months away.  The attached video filmed 11 March gives a medical snapshot from our resident virologist and Platinum International Health Care Fund Manager, Dr Bianca Ogden. 
 
We remain focused on downside risks, despite the already sharp market moves down since 20 February 2020 and have continued to reduce exposure in our flagship fund, the Platinum International Fund*.  As at New York close on 11 March 2020, the Platinum International Fund had a net exposure to markets of 59% which includes 22% shorts (a mix of index shorts and company specific shorts) and 19% cash.  At the same time, the Platinum Asia Fund has a net exposure of 59% given Asia’s earlier exposure to the virus and reaction to the situation.
 
As the situation unfolds, we are active in the face of rapid market moves.  In time, economies and markets will move past this and this will create its own set of investment ideas, many of which are already apparent.  To do well in the long run, we must first reduce the downside and then take advantage of the opportunities.
 
* Net exposure for the Platinum International Fund:  31 December 2019: 84%, 29 February 2020: 69%, 11 March 2020: 59%.

DISCLAIMER: This information has been prepared by Platinum Investment Management Limited ABN 25 063 565 006 AFSL 221935, trading as Platinum Asset Management ("Platinum"). It is general information only and has not been prepared taking into account any particular investor’s investment objectives, financial situation or needs, and should not be used as the basis for making an investment decision. You should obtain professional advice prior to making any investment decision. The market commentary reflects Platinum’s views and beliefs at the time of preparation, which are subject to change without notice. No representations or warranties are made by Platinum as to their accuracy or reliability. To the extent permitted by law, no liability is accepted by Platinum or any other company in the Platinum Group®, including any of their directors, officers or employees, for any loss or damage arising as a result of any reliance on this information. 

 

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