Although historically unique monetary and fiscal policy support measures have been launched - in Germany and the USA, for example, packages each amounting to around 10% of GDP - the market needs reliable data for a sustainable recovery, especially on the duration of the corona pandemic and its implications for the length of the economic "shutdown". The liquidity cushion remains overweight until then, so the equity position could be increased again at a later date.

Liquidity

In view of the temporary liquidity shortage in the economy, even first-class government bonds such as German Bunds and Swiss Confederation bonds came under pressure in recent weeks, as they had to be liquidated. As a result, the yield on high-quality corporate bonds also rose. These have now reached a yield level that represents attractive potential for long-term investors. We continue to advise against investments in the high-yield area as well as emerging market government bonds. 

Bonds

Following the sell-off in recent months, the overweight equity allocation has been pushed down to an underweight due to market conditions. We would recommend a rebalancing to a neutral equity quota in order to be able to participate in future price advances. When making acquisitions, we would favor broad, defensive markets. The recent price falls of around 25% have made valuations more favorable, but probably far less than initially expected, as we now have to assume a strong global earnings recession, at least for the first half of the year. The markets will remain very volatile as long as it is unclear how long the economic shutdown will have to last. 

Stocks

We maintain our neutral stance: in contrast to commercial properties, we expect a stable development for real estate funds that focus on residential properties, as experience shows that this segment is hardly affected by crises. However, despite the opening of the money spigot, mortgage interest rates have risen slightly. This should only subside once the crisis and risk aversion have been overcome.

Property

We are increasing the gold/commodities ratio to neutral, which is solely due to the increase in the gold content. Thus, gold appears to be sustainably attractive due to the massive monetary policy measures and the expected massive increase in new debt worldwide. The situation is quite different for commodities/oil: Although the price of oil has more than halved since the beginning of the year, a sustainable recovery will be difficult to achieve in the coming months - given the overwhelming oversupply of oil and overflowing oil inventories as a result of the severe slump in demand and the failure of the OPEC+ cooperation.

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