Going Global: Investing in the Time of Coronavirus

The coronavirus pandemic has roiled stock markets across the globe, as countries adjust to nationwide lockdown orders and economic uncertainty. It’s been a decidedly alarming time for investors in the United States, as the market has dipped to levels not seen since Black Monday in 1987, only to rise again with the constantly changing news. But there are countries, namely Australia and New Zealand, who have handled their response to the coronavirus well enough that their economies are ready to restart, strengthening the argument for looking beyond the United States when considering investment options — especially in times of crisis.
Both countries are well-positioned to participate in trade in the Asian marketplace as well as globally while offering investors the benefit of democratically elected governments, capitalist-friendly economic environments and transparency. This is supported by U.S. News & World Report’s ranking of Australia as number five and New Zealand as number eleven in their Overall Best Countries Ranking for 2020.
Spreading wealth across a variety of investment funds is a key principle of diversification, the purpose of which is to reduce risk in a portfolio from market volatility, and we believe there’s no better way to do so than to turn to successful economies outside that of the United States. Australia and New Zealand are currently positioning themselves on the global stage for a post-coronavirus comeback, as they ease lockdown restrictions after successfully flattening their respective curves. This is good news for investors who are looking to expose themselves to a range of global markets, as they look to avoid investing too heavily in countries whose poor responses to the pandemic have sent their economies spiraling.
While New Zealand’s Prime Minister Jacinda Ardern’s claims that the country won’t have open borders with the rest of the world “for a long time to come” caught the world’s attention, it was only part of the story. The economies of Australia and New Zealand heavily depend on tourism and trade with the outside world. That’s why they’re aggressively rebuilding ahead of many other countries, and we think the long-term benefits of investing down under are looking good. Australia and New Zealand have agreed on a “travel bubble” that will allow residents of the two nations to visit the other country, opening up cross-country tourism and trade. Australia has even initiated its own tourism campaign to push Aussies to start traveling. The two countries have always been extremely popular with tourists, with spectacular destinations like The Marlborough Lodge, a Gold List 2019 destination according to Luxury Travel Magazine.
The U.S.-based Commonwealth Australia-New Zealand Fund offers investors an opportunity to invest in companies that are tied economically to Australia or New Zealand. To learn more about the Fund, visit commonwealthfunds.com or call 888.345.1898.
Investments in stocks of any type involve risk because stock prices have no guaranteed value. Stock prices may fluctuate in response to various factors, including market conditions, political or other events, including pandemics, and developments affecting the particular issuer or its industry or geographic segment.
Click here to view the current investment holdings for Commonwealth Funds.