Q2 2020 Equity Strategy Performance

Patricia Bannan, CFA
July 30, 2020

How can investors financially endure this crisis? View highlights from our top proprietary equity strategies’ performance this quarter and learn how we are finding opportunities as we continue navigating anticipated market volatility.

Second quarter market overview: U.S. and international equities

Following the largest quarterly decline in U.S. markets in twelve years and a brutal first quarter internationally, markets rapidly reversed course in the second quarter. Gains were prompted by massive stimulus packages from central banks around the world, signs that Coronavirus growth was slowing and optimism surrounding progress on a potential vaccine.

In the U.S., we witnessed rising defaults on fixed income securities, escalating bankruptcies and a slightly improved unemployment rate of 11.1%—all with a rally cry for social justice in the heart of the backdrop and a growing focus on the upcoming Presidential election. Overseas, China’s “first in, first out” position with the virus has allowed their economy to somewhat normalize earlier than their global counterparts. European markets and the United Kingdom underperformed having entered the crisis on weaker economic footing and having comparatively less exposure to technology companies. Interestingly, in June, we saw a slight change in tone as international markets—emerging markets, in particular—outperformed the U.S. market even as the S&P 500 Index ended up 21% in the quarter.

Looking ahead, volatility is likely. In addition to being in an election year, uncertainty remains around a second wave of COVID-19 cases as infection rates rise in select U.S. states, raising the potential for economic closures or simply businesses operating at reduced capacity. While we emphasize the importance of long-term investing, we highlight below how CIBC Private Wealth’s five largest equity strategies have performed this quarter, and how we are taking advantage of the market volatility amid the world’s current state of uncertainty.

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Patricia Bannan is a managing director and Head of Equities for CIBC Private Wealth Management. In this role, she oversees the firm’s proprietary equity strategies.