FIS Digital – June 2020

Five lessons from the COVID-19 crisis

The coronavirus pandemic sparked a surge of volatility across global financial markets. What lessons could investors draw from the COVID-19 crisis? In this paper, MSCI looks at five key lessons for investors:

  • Global investing provided diversification opportunities, as the crisis spread to different regions at different times and with varying intensity.
  • Managing factors was more critical than picking stocks, as cross-sectional dispersion due to factors rose more sharply than stock-specific volatility.
  • Markets have not been indiscriminate during the crisis; large performance variation across factors provided opportunities for active management.
  • Companies with strong environmental, social and governance (ESG) characteristics suffered lower declines in relative terms during the crisis.
  • Index-based strategies played a critical role in facilitating price discovery and providing tools that enabled investors to make asset allocation changes.


To read the paper click here

Five Lessons for Investors From the COVID19 Crisis

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