What will happen when lockdown ends?

10 June 2020

5 minute read

As lockdown restrictions are lifted around the world, we consider what the end of containment may mean for the UK, and how investors should be invested to benefit.

Who's it for? All investors

The value of investments can fall as well as rise. You may get back less than you invest.

What you’ll learn:

  • What we can learn from the easing of lockdown restrictions in Asia.
  • Why countries are relaxing containment measures at different rates.
  • How investors should be positioned to benefit from returning global economic activity.

One of the best ways to understand how to emerge from the current lockdown restrictions is to look at other countries around the world. Many of these have faced the same problem but have come to sometimes radically different conclusions. However, at least some of these varying responses can be explained by how, where and when the virus hit their respective shores.

For example, England’s experience so far looks very different from the rest of the UK, thanks in some part to the fact that London was the first major zone of infection, perhaps unsurprising given its size and international reach1. Other factors such as the demographic profile and population size are also important considerations.

However, this is a battle which the modern world should be better equipped to fight than its predecessors. The breath-taking pace of potential vaccine development is one example of this. However, another is our ability to watch in more or less real time what works and what doesn’t around the world. This is particularly important as much of the world outside of Asia now thinks about relaxing containment measures at different rates.

The experience of Asia

Asia is obviously quite a long way ahead in this battle. China, for example, imposed one of the strictest lockdowns to date back at the end of January (full lockdown was imposed on Hubei province on 23 January and two days later all provinces declared states of emergency), and began relaxing those measures around a month later. It has not been straightforward since then. Further outbreaks, as elsewhere in Asia, have led to re-imposed, albeit so far more localised, restrictions.

From the perspective of the economic recovery, the analysis is complicated by the fact that none of these economies operates in a vacuum. They are all, to varying degrees, subject to economic forces beyond their borders. So, although parts of Asia’s economy have recovered some of their previous lustre, the slump in demand from the rest of the world, as it endured its first wave of the outbreak, has clearly weighed on Asia too.

Asia also teaches us that we should be wary of assuming that as soon as certain activities become legitimate again, consumers will return to previous norms.

The early openers

Data, such as electricity consumption, illustrate that the world outside of Asia is already making strides in that return to a new normal. However, some countries are moving a lot quicker than others. Again, we would point out that analysis on one government’s efforts versus another are not always appropriate. Factors ranging from pre-existing differences in a country’s demographic and morbidity profile, to how and where the virus landed on their respective shores muddy this analysis significantly. Aside from which, it is simply too early in this crisis to tell.

Nonetheless, as noted above, this is an area where policy around the world is being fed in real time by live research. To this extent, there is some cause for tentative encouragement in the economies that have moved to open a little faster – there is so far no consistent evidence of a related spike in daily confirmed cases2.

It is very early days yet, but as time goes by we would expect policymakers around the world to learn from the successes and failures we see from others in this live global experiment. A reminder that this is a battle that will be most effectively fought with global transparency and co-operation3.

Investment conclusion

The combination of returning global economic activity with positive news on the outbreak has provided further support for shares in particular. We would always advocate time in the market rather than timing the market however, if you are investing today, there are likely to be some challenging days ahead.

We continue to believe that a diversified portfolio invested across a broad mix of assets remains the best way to beat inflation over the next five to ten years.

Where to invest

To best navigate the ongoing market uncertainty, we would advocate taking a long-term diversified approach to investing. The Barclays Ready-made Investments are just one example of a range of diversified funds which allow you to select the level of risk you are most comfortable with. These multi-asset funds invest across a range of asset classes and regions, offering a globally diversified one-stop solution for investors. Ready-made Investments are not the only funds that we offer and they won’t be appropriate for everyone.

Smart Investor offers a wide range of funds, and our Barclays Funds List may help you to narrow down the wide range available to invest in. These funds are selected by Barclays investment specialists and, based on our research, they’re the funds that have built solid reputations and established sound investment processes.

Funds are designed for the long term so you should only consider them if you can stay invested for at least five years.

Podcast: What's in store for the UK after the crisis subsides?

In this podcast Nicky Eggers (Head of Investments) talks to Will Hobbs (Chief Investment Officer) about why, with the bad news seemingly rolling in day after day, stock markets continue to rise. They also take a closer look at the prospects for the UK economy, and the potential for European shares to catch up on a decade of underperformance.


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The value of investments can fall as well as rise. You may get back less than you invest. Tax rules can change and their effects on you will depend on your individual circumstances. Smart Investor doesn’t offer personal financial advice. If you’re not sure about investing, seek independent advice.

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