Important Links

Balancing Risks and Opportunities as the Pandemic Accelerates

6 April 2020EconomicsAsset AllocationCovid-19
  • According to the World Health Organization, the number of COVID-19 cases globally crossed the 1 million mark on 2 April and as of 5 April, there are 1,136,000 cases in 208 countries. The US now has the most number of cases at 273,000, more than 82,900 in China. In Citi’s view, the speed and depth with which governments respond aggressively to the health threats of COVID-19 could play a major role in disease outcomes, as well as in the length of time the pandemic may impact its society.
  • Current mitigation strategies range from very limited (Iran, Mexico) to extensive (China, South Korea) with other countries, like the US, adopting a decentralized approach.
  • The likelihood of significant disease spread across the US remains strong as the mitigation plans were not centralized, nor optimized. Citi analysts expect that major cities with high levels of international air traffic may see the greatest impacts, but are also concerned about smaller cities that have not taken precautions due to their belief that the current levels of disease are indicative of future outcomes.

Balancing Risks and Opportunities as the Pandemic Accelerates

Past performance does not guarantee future results, real results may fluctuate.

Citi’s view on the financial markets and asset allocation

  • During this period of uncertainty, It is crucial to maintain an investment philosophy that includes maintaining a well-balanced diversified portfolio and avoid the temptation to rapidly change allocations. Value exists in areas including the health care sector, Asian equities and capital markets structures that take advantage of elevated volatility at this time. Citi analysts also think that new portfolios can be properly established by having a disciplined plan to invest over time.

While Citi analysts are confident in an eventual recovery, there are four major risks to our outlook and near-term market performance. These are:

  • When the economy will turn back on and the speed with which it will do so;
  • Global macro risks including supply chain disruptions and a lack of international cooperation;
  • Implementation of policy: Can governments deliver the benefits they promise in a timely fashion?
  • Unavoidable credit impacts that could include defaults, credit downgrades, bankruptcies or business closures.

Our recent research

Assessing Quality in Equities

Citi analysts prefer equity portfolios that focus on high quality balance sheets as they may be better able to withstand severe economic headwinds.

Find out more

Equities

Is Policy Enough to Bridge Over Economic Shock?

Policymakers are taking extreme and unprecedented steps to limit the disruption’s long-term effects on economic viability. If policymakers are able to compress a major economic shock into a relatively short period, high levels of financial market volatility are expected for the foreseeable future.

Find out more

EconomicsCovid-19

Europe: Long-term Focus on Strong Company Balance Sheets

The COVID-19 pandemic is causing a widespread cash flow crisis for European companies and significant downgrades to earnings forecasts is expected. Citi analysts believe that some of the downgrades and equity price falls could be overdone and may create opportunities.

Find out more

EuropeCovid-19

Take the first steps to your wealth management planning with Citi

Speak to a Relationship Manager
0207 500 1992

Already with Citi? Contact your relationship manager or view product availability on Citi Online

Why choose Citi

A relationship - not just a bank account

A dedicated Relationship Manager giving you access to our internal team of product experts and all our benefits

Access to exclusive Citi products

A range of current and investment products available both on shore and offshore, in the currency of your choice
Multi-currency accounts
Investment products

Global services for a global lifestyle

Our team is here to support you getting started in UK or with International travel and relocation
Moving to and from the UK
Travelling overseas

Offshore investments

We offer a diverse range of banking and investment services, including for those who want access to offshore investments

Find out more

Just moved to the UK?

We can save you time money and hassle. If you are a foreign national in the UK, Citi's International Banking Service can help you manage your money, home and away.

Find out more

Investment products are not insured by any governmental agencies, are not bank deposits, and are neither obligations of, nor guaranteed by, Citigroup, or any of its affiliates, unless otherwise stated. Investment products are subject to investment risks, including possible loss of some or all of the principal amount invested. Past performance is not indicative of future results, investments can go down as well as up.

“Citi analysts” refers to investment professionals within Citi Research (“CR”), Citi Global Markets Inc. (“CGMI”) and voting members of the Citi Global Investment Committee. Citibank N.A. and its affiliates / subsidiaries provide no independent research or analysis in the substance or preparation of this document. The information on this page has been obtained from reports issued by CGMI. Such information is based on sources CGMI believes to be reliable. CGMI, however, does not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute CGMI’s judgment as of the date of this page and are subject to change without notice. This page is for general information purposes only and is not intended as a recommendation or an offer or solicitation for the purchase or sale of any security or currency. No part of this page may be reproduced in any manner without the written consent of Citibank N.A. Information on this page has been prepared without taking account of the objectives, financial situation, or needs of any particular investor. Any person considering an investment should consider the appropriateness of the investment having regard to their objectives, financial situation, or needs, and should seek independent advice on the suitability or otherwise of a particular investment. Citi Research (CR) is a division of Citigroup Global Markets Inc. (the "Firm"), which does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this information. Investors should consider this information as only a single factor in making their investment decision.

Opinions expressed herein may differ from the opinions expressed by other businesses or affiliates of Citigroup, Inc., and are not intended to be a forecast of future events, a guarantee of future results or investment advice, and are subject to change based on market and other conditions.