The global economic impact of the COVID-19 pandemic continues to hammer portfolios and assets worldwide. With more than 1 million reported cases worldwide and one-third of the global population not spending and urged to stay home, some assets viewed as safe have offered little protection.
Bad company: The coronavirus' economic impact made the first quarter of 2020 the fourth-worst three-month period for U.S. equities since 1995, behind only the darkest days of the global financial crisis.
Diversification fades: Assets with low correlations to equities saw their diversification benefits fade during March. Treasuries rode yields lower before the curve steepened, gold slid mid-month and REITs hit a near one-for-one relationship.
Currency impact: U.S.-based investors and dollar hedgers held on better than their international counterparts as the dollar's relative strength rose in March. Only loonie-hedged investors did better.
Mind the gap: Corporate yield spreads rose 2-1/2 to three times their Dec. 31 levels. Investment-grade corporate debt dislocated from the broader class. Long-term Treasuries did well, but at the cost of falling yields.