Amazingly, it was only nine short weeks ago that we mobilized to protect our Shanghai associates and pivot our business in the face of COVID-19. Now, virtually every facet of our lives is being affected. Our future is only as strong as our willingness to confront this reality, however, and I am heartened to see us doing so in spades throughout our organization and our communities.
Safeguarding the well-being of our associates while serving our clients remains my top priority. Around the globe, over 90% of our associates are working from home. A relentless and proactive cadence of personal connections and client outreach is our daily norm as we position ourselves to exceed client expectations and act with the sense of urgency our business demands. We are also constantly updating our Managing Through Volatility page to help our clients navigate these difficult times.
Our call volumes are through the roof as we have replaced in-person meetings with virtual ones, and we are hosting regular client webcasts on current market conditions and portfolio positioning in every region. One of the financial advisors we work with sent us this email yesterday: “When you spoke on the video call about the value we bring to clients, it brought on chills and tears of pride for the work we do. Now is our greatest hour to reach out and serve. Thank you for reminding me of that.” Powerful.
The coordinated actions of central banks and national governments will determine the depth and duration of the global economic downturn. I am increasingly encouraged by magnified fiscal stimulus measures including the $2 trillion stimulus package that was just passed by the U.S. Senate. It is critical to get money quickly into the hands of people and businesses to avoid driving millions into bankruptcy. Notwithstanding extraordinary stimulus packages, second-quarter global GDP is expected to decline 13% or more1 - unprecedented but not surprising. Markets are manically digesting how to discount the sharp economic contraction with the uncertainty surrounding the earnings recovery. As of yesterday’s close, the MSCI All World Index is down 28% from its peak on February 12 and is now at roughly the same level it was in early 2017. For perspective, however, the bull market following the GFC lasted almost 11 years. So even with these recent declines, the MSCI All World Index has still experienced annualized market gains of 7.8% since March 3, 2009.2
We will emerge from this pandemic and China seems to be leading the way. On March 19, they reported that they did not have any new locally transmitted cases of COVID-19. Our associates in Shanghai recently began transitioning back into the office. The timeline for containing this virus will vary by country and region, but we will get to the other side.
Speaking of the other side, this global experience will undoubtedly change the way we live and work. Our personal and professional worlds have collided like never before. I expect this will be a tipping point for permanently mothballing our industrial-age mindset of work. Fully leveraging networks and technology within a globally connected society will allow us to increase productivity, improve lifestyles and reduce our collective carbon footprint. However, this crisis will likely leave an indelible mark on an already serious issue for a ballooning retirement and wealth inequity gap.
I am heartened by many of the grassroots efforts taking place throughout the world. We are showing enormous resolve and resilience. I am grateful to my colleagues for their herculean efforts during this time. We are focused on coming through this stronger than ever. Together.
1 Bank of America Merrill Lynch, Bloomberg, Goldman Sachs, JP Morgan, UBS (as of 3/25/20)
2 MSCI, Thomson Reuters Datastream (as of 3/25/20)
Disclosures
These views are subject to change at any time based upon market or other conditions and are current as of the date at the top of the page.
Investing involves risk and principal loss is possible.
Past performance does not guarantee future performance.
Forecasting represents predictions of market prices and/or volume patterns utilizing varying analytical data. It is not representative of a projection of the stock market, or of any specific investment.
This material is not an offer, solicitation or recommendation to purchase any security. Nothing contained in this material is intended to constitute legal, tax, securities or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type.
The general information contained in this publication should not be acted upon without obtaining specific legal, tax and investment advice from a licensed professional. The information, analysis and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual entity.
Please remember that all investments carry some level of risk. Although steps can be taken to help reduce risk it cannot be completely removed. They do no not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.
Investments that are allocated across multiple types of securities may be exposed to a variety of risks based on the asset classes, investment styles, market sectors, and size of companies preferred by the investment managers. Investors should consider how the combined risks impact their total investment portfolio and understand that different risks can lead to varying financial consequences, including loss of principal. Please see a prospectus for further details.
Russell Investments' ownership is composed of a majority stake held by funds managed by TA Associates with minority stakes held by funds managed by Reverence Capital Partners and Russell Investments' management.
Frank Russell Company is the owner of the Russell trademarks contained in this material and all trademark rights related to the Russell trademarks, which the members of the Russell Investments group of companies are permitted to use under license from Frank Russell Company. The members of the Russell Investments group of companies are not affiliated in any manner with Frank Russell Company or any entity operating under the "FTSE RUSSELL" brand.
Copyright © Russell Investments Group LLC 2020. All rights reserved.
This material is proprietary and may not be reproduced, transferred, or distributed in any form without prior written permission from Russell Investments. It is delivered on an “as is” basis without warranty.
UNI-11640