Market Commentary – 2020 Mid-Year Letter

2020 Mid-Year Letter

Our 2020 mid-year outlook summarises our views and insights on the key questions impacting our portfolios today.


The first half of 2020 has been the most volatile period in financial markets for a decade and writing about it could fill many pages. The global economy suffered a virtual cardiac arrest in March and April as most major economies implemented country-wide “lock-downs” to stem the spread of the Covid-19 virus. These measures led to zero (or near zero) revenues for large segments of the economy such as travel, leisure, restaurants etc., and a corresponding huge spike in unemployment. In the US alone, around 30 million people (c.20% of all workers) filed for unemployment benefit which was more than double the peak of the 2008/09 recession and equivalent to the removal of all new jobs created since the last crisis.

When we wrote this equivalent letter in the summer of 2019 we concluded: “The current environment can, therefore, be summarized as the tail end of a long financial asset bull market fuelled by a decade of low interest rates and central bank liquidity creation”. However, we also said that valuations were not so extreme that one should be in cash and that investing activity should continue, but with more focus on managing the downside. Therefore, in our read of the cycle, we were broadly correct. However, we certainly did not anticipate the trigger for a change being the ramifications of a global pandemic. In mid-January 2020, we wrote only that “we are also witnessing negative sentiment pick up due to the coronavirus scare – it is too soon to tell what the impact will be, but in the near term it will almost certainly reduce growth in 2020 in China, and likely extend into other parts of Asia”.

To continue reading the report in full, please download the full PDF document below:

CPI 2020 Mid-Year letter

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