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As a client of, or an adviser working with Quilter Cheviot, we appreciate that you may have questions around how to contact your investment manager, what to do about meetings you had scheduled, how your money is safeguarded, and more. Please click here for more information. If you have any questions relating to your investments, please click here to read what Chief Investment Strategist, Alan McIntosh has to say about the market impact from coronavirus. For more information on how our research and investment teams are responding to the virus, please click here to visit our coronavirus hub.

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Weekly comment: Can healthcare companies help investors ride out the crisis?

Weekly podcast: Markets Uncut

Join the Markets Uncut team as they look at how healthcare companies are performing and the progress of a potential vaccine, whether investment trusts are a good option for people wanting an income from their investments and the usual economic round-up and look ahead from Richard Carter.

Market comment – Alan McIntosh, Chief Investment Strategist

Stock markets were generally down last week, with the large increase in US jobless numbers introducing a pretty sour note on Friday. Interestingly, much of the comment over the weekend was about exit strategies from the current lockdown imposed by many governments on their citizens. Sweden is a notable exception to most other countries, however. It is allowing people to mingle on the basis that ‘herd immunity’ is likely to be the most effective approach for them.

Experts are poring over the trajectory of infection and death rates to get a sense of whether these curves are flattening out or not. It would appear that peaks may well be reached within the next few weeks in Europe and the US. Professor Neil Ferguson of Imperial College, one of the government’s key advisers, believes that this could be in seven to ten days’ time for the UK. Hence the discussions about ways of easing lockdowns once the peak has passed. Markets have thus started the week on a more positive tone.

To pay or not to pay, that is the question. When it comes to dividends, we have already seen the UK financial regulator instruct the banks not to pay dividends to investors for the balance of 2020. Insurance companies have been asked by the same regulator to be prudent when judging whether or not to pay one. Of note, Legal and General has confirmed that they will pay their dividend.

Many companies in other sectors are not in such a favourable position, having seen their businesses hit hard over the past month or so. They need to conserve cash. The UK stock market has been higher yielding than many others for a number of years. This is partly a function of having a larger proportion of more mature industries such as oil and gas and tobacco, and less of the higher growth technology businesses that tend to reinvest most of their cash flow. For now, it looks as though these sectors will still be able to afford their pay-outs. Like much else however, it depends on how long coronavirus affects the world.

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