Natixis IM cuts equity exposure on coronavirus concerns
Natixis Investment Managers has reduced the exposure to equities in its funds in light of coronavirus as it expects to see higher volatility in stockmarkets.
Worldwide markets suffered a setback last week with the US reporting its worst stockmarket performance since the Global Financial Crisis and entering correction territory.
The firm reduced allocations to equities in Germany, Europe and Japan by 3% and instead added an allocation to its US Treasury bucket.
Esty Dwek, head of global market strategy at Natixis Investment Managers, said: “We reduced our allocation to equities in anticipation of higher volatility and we believe this is likely to continue. We also believe short-term downside risks persist, as earlier market resilience now appears ‘broken’.
“We expect yields to remain at extremely low levels for some time, as the full impact of the virus is yet to be measured and growth concerns are likely to linger.”
Expectations for a quick recovery had reduced lately as the spread of the virus to different countries such as Italy and South Korea was likely to delay recovery as each implemented their own different policies.
There was also the danger of the virus spreading to countries which were less well-equipped with healthcare resources.
“For now, we maintain our view that 2020 growth will not be completely derailed, but the longer that the outbreak lasts and the more it spreads, the bigger the risk to overall growth.
“We continue to keep an eye on contagion to new regions and any new containment measures that could add to growth fears, especially in Europe or the US.”
AUTHOR
Laura Dew
Recommended for you
Asset managers may be urged to diversify their product ranges, but investment executives have warned any M&A deal should avoid simply filling gaps and instead consider long-term value creation.
Specialist wealth platform provider Mason Stevens has become the latest target of an acquisition as it enters a binding agreement with a leading Sydney-based private equity firm.
Fund managers are entering 2025 with the most bullish sentiment since August 2021 and record high allocations to US equities, thanks to the incoming Trump administration.
An independent expert has ruled the Perpetual deal with KKR is no longer in the best interest of shareholders in light of the increased tax liabilities.
