Economic uncertainty existed before the COVID-19 pandemic, but investment performance depends on more than economic fundamentals, according to GSFM and its fund manager partners Payden & Rygel, Munro Partners and Redpoint Investment Management.

Stephen Miller, investment strategist at GSFM, says investing uncertainty is elevated, not just as a result of the COVID-19 pandemic, but also because of other pre-existing economic issues.

“Trade-wars, deglobalisation and re-regulation, dysfunctional politics, cyber-wars, climate change, inequality, and ‘oligopolistic privilege’ were already playing out in the global economy, and COVID-19 has intensely exacerbated uncertainty.

“However, monetary policy is exhausted and is no longer an appropriate tool to deal with these challenges. Fiscal policy will need to do the heavy lifting but it needs to be intelligently crafted. The world is at an inflection point when it comes to policy with tectonic shifts in the offing not just on the macro front but also on the regulatory front. The focus on these areas is likely to intensify into the November US elections.

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