Perspective

Charity Investment

Cazenove Charities market update webinar


Caspar Rock

Caspar Rock

Chief Investment Officer

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Tom Montagu-Pollock

Tom Montagu-Pollock

Portfolio Director and Charity Multi-Asset Fund Manager

Cazenove Charities

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Recent stock market falls have exceeded those experienced in the past decade, including the Eurozone debt crisis of 2011 and the Chinese growth scare of 2015-2016. The week ending Friday 13 March ranked as one of the worst for global equity markets in over a decade.

The spread of the virus was already casting uncertainty over the outlook for economic growth and corporate earnings. The oil price fall is causing investors to reassess the prospects of companies and economies heavily exposed to oil production.

In response to the unfolding crisis, the Federal Reserve again cut US interest rates on 15 March. Its target rate is now 0.0%-0.25%. The US central bank also announced $700 billion of asset purchases, known as "quantitative easing" (QE), and a range of other supportive measures.

Heading into this year our portfolios had holdings in absolute return, gold and other alternative assets. These positions reflected our concern that equity markets were highly valued. This position has served portfolios well in recent weeks and protected clients’ from the worst of the equity market falls.

History has shown that trying to "time" market lows is a difficult exercise, and so we are taking an approach of incrementally adding to risk assets such as equities. Triggers that could lead us to increase our equity exposure could include:

  • clear signs that the infection rate is peaking and/or decreasing
  • the identification of a vaccine that can be mass produced
  • a coordinated, credible strategy to prevent the spread of the virus
  • further policy stimulus
  • further market weakness from current level

The outbreak of the virus is impacting all of us. It has understandably caused market disruption, however, our clear commitment is that we will continue to put our clients’ interests first. We can say with conviction that we believe that the current situation will not affect our ability to manage client portfolios, and will enable us to continue providing you with the service you expect.

Please do get in touch if you do have any further questions. The Charities team are absolutely here to help and support you in these uncertain times. 

The opinions contained herein are those of the author and do not necessarily represent the house view. This document is intended to be for information purposes only. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Cazenove Capital does not warrant its completeness or accuracy. No responsibility can be accepted for errors of fact or opinion. This does not exclude or restrict any duty or liability that Cazenove Capital has to its customers under the Financial Services and Markets Act 2000 (as amended from time to time) or any other regulatory system. Cazenove Capital is part of the Schroder Group and a trading name of Schroder & Co. Registered Office at 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. For your security, communications may be taped and monitored. 

Contact Cazenove Charities

Achieving your charity's investment objectives takes time and thought. To find out how we can help you please contact:

James Brennan

James Brennan

Portfolio Director james.brennan@cazenovecapital.com