How has the coronavirus affected your day-to-day work?
Volatility has spiked on both fronts, which has created issues but also opportunities! As a team we have always had the ability and infrastructure needed to work from home, so we are already well set up practically speaking. Within portfolios, we have been busier than ever – speaking to underlying fund managers, colleagues and clients as we work through this extraordinary time.
What has been your biggest contributor to performance since the coronavirus hit markets? What has been your biggest detractor?
The rush for the door in March created a vacuum in pricing for many areas of the market. We always aim to run diversified portfolios that should protect in more volatile times but the sheer speed and magnitude of the sell-off brought correlations in, making diversification less effective. The biggest contributors would include our positions in gold, fixed interest and market neutral absolute return funds.
What has surprised you most about markets during the coronavirus sell-off?
The speed of the declines has been something to behold. The bounce-back from the lows less so as this is classic market behaviour. We are deeply suspicious of this in equity land, in particular.
What feedback have you had from clients since the sell-off?
We have taken client communication up a notch or three right from the off with bi-weekly webcasts and twice weekly notes from Anthony Willis on the team plus lots of direct contact for anyone who has wanted to meet with us. We have a duty to be front and centre for clients at times such as these. Feedback has been positive on this front.
What are the key messages you want to hear from your holdings at the moment?
That they are responding to new news and not just having a view and sticking to it. This is a new world and facts and fortunes are going to change regularly. We and they are all working incredibly hard to keep abreast of things.
How does this compare to other market sell-offs you have managed money through?
This sell-off is very different – though market psychology is pretty similar. Unlike other crises, this has been entered into by deliberate policy action. This is very unusual. We know the cause of the problem, and the response from the authorities is unprecedented and, to a point, calculated. The unintended consequences are the unknown. As usual the market is looking for the long-term positives, having stared into the abyss.
How do you find working remotely during volatile markets?
I am a fan of home-working as it is something I have done regularly for a long time, so the adjustment has been less significant for me than others. That said, having my two boys, husband and dog around is ‘interesting’ at times.
What do you do for fun when you take a break from working at home?
Mark schoolwork, teach my husband how to use PowerPoint – he is a landscape gardener doing a course, which means he is creating presentations for the first time. It is not his natural skill set … – and, if I get up early enough, take the dog for a walk. It’s all very rock-and-roll in our house.
What is your favourite snack when working from home?
Anything I can find that hasn’t already been eaten by the menfolk of the house (so not usually very much).
Do you have a ‘top tip’ to share on working remotely?
Make sure you take regular breaks and move! Also, teach your children how to make tea.
Kelly Prior is an investment manager on the multi-manager team at BMO Global Asset Management
