Market and coronavirus update

Market and coronavirus update – 12 March 2020

BY ANDREW CLIFFORD, 12 MAR 2020

The currentsituation is dynamic; markets are responding to a reduction in economicactivity brought about by governments, corporates and individuals’ responses tothe coronavirus threat. It is highly likely we are already in a recession.

The virus will continue to spread,slowed by any containment measures, until we find and deploy an anti-viral orvaccine. There are promising anti-virals in trial indicating this may bea matter of weeks rather than months away. The attached video filmed 11March gives a medical snapshot from our resident virologist and PlatinumInternational Health Care Fund Manager, Dr Bianca Ogden.

We remain focused on downside risks, despite the already sharp market movesdown since 20 February 2020 and have continued to reduce exposure in ourflagship fund, the Platinum International Fund*. As at New York close on11 March 2020, the Platinum International Fund had a net exposure to markets of59% which includes 22% shorts (a mix of index shorts and company specificshorts) and 19% cash. At the same time, the Platinum Asia Fund has a netexposure of 59% given Asia’s earlier exposure to the virus and reaction to thesituation.

As the situation unfolds, we are active in the face of rapid market moves. In time, economies and markets will move past this and this will createits own set of investment ideas, many of which are already apparent. Todo well in the long run, we must first reduce the downside and then takeadvantage of the opportunities.

* Net exposure for the Platinum International Fund: 31 December 2019:84%, 29 February 2020: 69%, 11 March 2020: 59%.

www.platinum.com.au/Insights-Tools/The-Journal/Market-and-coronarvirus-update-%E2%80%93-12-March-2019