Continued focus on high-quality companies to pay off despite potential cyclical rally

Firms likely to re-rate, says Columbia Threadneedle's Davies

Any post-coronavirus rally for those cyclical stocks able to survive the crisis will be "difficult to sustain" in a continued low growth, interest rate and inflation environment, according to Columbia Threadneedle's CIO William Davies.

One of the defining features of the coronavirus market sell-off seen in risk assets through late February and March, Davies said, was that market leadership changed little, with those stocks with higher-quality balance sheets continuing to outperform lower-quality names. Columbia Threadneedle veteran Barrie Whitman to retire Between 19 February and 23 March 2020, for instance, the MSCI World IMI Growth index declined by 23.2%, less than the 30% loss recorded by its Value counterpart, according to data from FE fundinfo. In the first five months of 2020, global growth stocks were down b...