Our Thoughts on the Corona Crisis

Of primary importance at the moment is the health and well being of everyone and we hope the authorities are successful in their commendable efforts to contain the impact of the pandemic.  From an investment perspective,  the crisis, illustrates starkly the importance of the inherent strength of companies and their ability to negotiate very different conditions. Two vital attributes of businesses held within the Chawton Global Equity Income Fund are helping them negotiate this shock.  Firstly, they are financially strong; with net cash on the balance sheet or modest levels of debt. Secondly, a significant proportion provide products or services without which it is very difficult for society to operate.  These range from food, personal care and health products (Costco, Procter and Gamble, Roche) to scientific research publications (RELX), elevator maintenance (Kone) and bathroom plumbing (Geberit).  So what is our outlook?   With the fund still to achieve its first anniversary, we have already experienced two very different macro economic environments.  This illustrates how difficult it is to predict the immediate future.  However, the further we look out the easier it becomes as a number of factors come into play.  Firstly, is the general ingenuity and tenacity of society when faced with adverse events.  As I write, countries and companies are co-operating globally to direct tremendous resource at the pandemic and will address it – it is just a question of time.  Secondly, economies and equity markets will recover and the long term outlook for both is as good as ever.  Finally, it is important to remember the companies you own through this fund have been selected to deliver long term sustainable returns and we continue to believe they will achieve this.

Please refer to risk warnings and regulatory information: Here.