Coronavirus - a further market update - Milford Asset

Coronavirus – a further market update

Wayne Gentle

Chief Investment Officer & Executive Director

Wayne is the Chief Investment Officer at Milford and the Head of Australian Investments. He is the Co-Portfolio Manager of the Australian Equities Wholesale, Trans-Tasman Equity and Australian Absolute Growth Funds. He has over 25 years’ experience in managing a diverse range of Australian equities portfolios. Prior to joining Milford, Wayne was Deputy Head of Australian Equities at Colonial First State Global Asset Management. Previously, Wayne held Senior Analyst and Deputy Head of Research roles with Allianz Global Investors, and JP Morgan.

Wayne holds a Bachelor of Economics degree from Sydney University, a Postgraduate Diploma in Applied Finance and Investment from the Securities Institute of Australia, and is a Graduate of the Australian Institute of Company Directors.

The Milford team continues to actively manage your investments through the ongoing developments relating to the coronavirus (COVID-19). We have been positioning your investments to cushion the impact of volatility, particularly in sectors heavily exposed to the potential economic impact of the virus.

After markets were initially slow to react, they have responded with increased volatility over recent weeks. Since we last wrote to you, the situation has been compounded by the significant fall in the oil price, largely caused by the emergence of a likely oil price war. Markets have reacted swiftly and in episodes of volatility such as this, it is likely that we will continue to see large swings in markets in both directions.

We adopted a cautious approach prior to this period of volatility and during early February reduced exposure in the funds to key sectors likely to be affected by the economic impact of the virus. We have low relative exposure to sectors such as oil, banking, travel and tourism. Our team of 28 investment professionals is focussed on closely monitoring the spread of the virus, the economic and financial impact, changes in related markets and government responses.

We will maintain our patient and disciplined approach as we navigate through the current volatility. Whilst not immune to the volatility, our defensive positioning with significant cash holdings allows us to cushion the impact and to respond to buying opportunities as they arise.

We recognise that seeing negative short term returns can be unsettling and encourage our investors to focus on the long term, recognise the benefits of staying the course, and speak to us should you need to find out more or understand our latest positioning in our funds.

The Milford team invests in the same funds alongside you, have many years of collective experience in managing through periods of volatility and will continue to work hard to deliver the best outcome for our clients in the funds over their specific time horizon.

If you would like to discuss anything further please get in touch with the team.

Disclaimer: The material contained herein is based on information believed to be accurate and reliable although no guarantee can be given that this is the case. This is intended to provide general information only. It does not take into account your investment needs or personal circumstances. It is not intended to be viewed as investment or financial advice. Before making any financial decisions, you may wish to seek independent financial advice.

Disclosure of interest: Milford Funds Ltd. holds shares on BHP Group on behalf of clients.