Last updated: 03:40 / Thursday, 5 November 2020
Pictet Asset Management

Going Viral: Scenarios for a Post-Pandemic World

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  • There are various paths the world could take in the wake of the Covid-19 health crisis. Pictet Asset Management's study presents investors with four scenarios that might plausibly unfold over the next five to 10 years

The coronavirus pandemic has provided the world with its toughest stress test in more than 80 years. It has given rise to complex moral choices - not only for governments and businesses but also communities and families. Such has been the upheaval caused by Covid-19 that it is difficult to envisage a return to the life we knew before the virus struck.

Indeed, the history of pandemics shows that public health crises are profoundly disruptive. Their economic, societal and geo-political effects are often long-lasting, unfolding over many years. At Pictet Asset Management, we have conducted a study in partnership with the Copenhagen Institute for Futures Studies to better understand how the investment landscape might evolve in the next five to 10 years. The research presents investors with four scenarios that might plausibly unfold in the wake of the coronavirus pandemic.

We hope that these scenarios would serve as a starting point for long-term planning and strategic asset allocation. Our aim is to ensure investors are asking the right questions. 

  • Scenario A – Act local, think global: Citizens emerge from the public health crisis with a new moral purpose, having come to accept that that inequality and environmental degradation can only be reversed through collective action. What is the impact of global productivity and trade? 
  • Scenario B - All together now:The world transitions from a largely unipolar world directed by the US into a multi-polar one in which nation states and international organisations collaborate. Discover which investment trends could be on the rise.
  • Scenario C - Not my problem: Citizens prioritise their own livelihoods and financial security and disengage from political discourse and community life. Governments struggle to transition to a more inclusive economy. What course could this take?
  • Scenario D - Going it alone: Nation states turn inwards in an effort to safeguard their own natural resources, industries and workers. What is the impact on global problems such as environmental degradation and social inequality?

Each scenario has its own distinct economic, societal and geopolitical landscape. And each has its own set of implications for investors – industries that thrive in certain conditions might struggle for their very survival in others. 

 

Tribune written by Steve Freedman, Senior Product Specialist at Pictet Asset Management.

 

To discover the four scenarios, download the report here.

 

Information, opinions and estimates contained in this document reflect a judgment at the original date of publication and are subject to risks and uncertainties that could cause actual results to differ materially from those presented herein.

Important notes

This material is for distribution to professional investors only. However it is not intended for distribution to any person or entity who is a citizen or resident of any locality, state, country or other jurisdiction where such distribution, publication, or use would be contrary to law or regulation. Information used in the preparation of this document is based upon sources believed to be reliable, but no representation or warranty is given as to the accuracy or completeness of those sources. Any opinion, estimate or forecast may be changed at any time without prior warning.  Investors should read the prospectus or offering memorandum before investing in any Pictet managed funds. Tax treatment depends on the individual circumstances of each investor and may be subject to change in the future.  Past performance is not a guide to future performance.  The value of investments and the income from them can fall as well as rise and is not guaranteed.  You may not get back the amount originally invested. 

This document has been issued in Switzerland by Pictet Asset Management SA and in the rest of the world by Pictet Asset Management Limited, which is authorised and regulated by the Financial Conduct Authority, and may not be reproduced or distributed, either in part or in full, without their prior authorisation.

For US investors, Shares sold in the United States or to US Persons will only be sold in private placements to accredited investors pursuant to exemptions from SEC registration under the Section 4(2) and Regulation D private placement exemptions under the 1933 Act and qualified clients as defined under the 1940 Act. The Shares of the Pictet funds have not been registered under the 1933 Act and may not, except in transactions which do not violate United States securities laws, be directly or indirectly offered or sold in the United States or to any US Person. The Management Fund Companies of the Pictet Group will not be registered under the 1940 Act.

Pictet Asset Management Inc. (Pictet AM Inc) is responsible for effecting solicitation in North America to promote the portfolio management services of Pictet Asset Management Limited (Pictet AM Ltd) and Pictet Asset Management SA (Pictet AM SA).

In the USA, Pictet AM Inc. is registered as an SEC Investment Adviser and its activities are conducted in full compliance with the SEC rules applicable to the marketing of affiliate entities as prescribed in the Adviser Act of 1940 ref. 17CFR275.206(4)-3.

 

 

About Steve Freedman

Stephen Freedman joined Pictet Asset Management in 2019 as Senior Product Specialist in the Thematic Equities team. Before joining Pictet, Stephen was at UBS Wealth Management, where he most recently served as head of Sustainable Investing Solutions for the Americas, based in New York.  

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