COVID-19 Q & A
The market value of my investment has decreased significantly, is my money safe or will I lose it all?
- It is natural to feel this way after losing money. History shows that investment markets have always recovered, and we have no reason to believe otherwise.
- Unit trusts are generally medium-to long-term investments. The value of units may go down as well as up. Fluctuations or movements in exchange rates will also cause the value of underlying international investments to go up and down.
- The key is to stick to your investment plan.
Should I switch or withdraw my investment?
- Staying invested is a conscious action, as opposed to just doing nothing.
- If you have chosen the correct investment for your long-term needs, switching funds or withdrawing from your investment now due to short term losses can adversely impact the likelihood of achieving your long-term goals.
What should I expect in terms of volatility and returns on my investment?
- This is a situation we have not experienced before and it may be a while before the virus is contained on a global scale. This will cause extended periods of volatility in financial markets and therefore poor returns.
What are you doing to manage the funds in this difficult time?
- The Megafin Funds being diversified fund of funds have held up well relative to their industry peers, clients can rest assured that their investments are in good hands. Prior to the sell-off, the funds were positioned defensively in anticipation of a downturn, we did not expect it to be as severe as this though. The downturn does provide an attractive entry point to produce good future returns.
- Although no one knew that the Coronavirus outbreak would be the catalyst for a downturn in financial markets, we’ve been preparing for these difficult times as our research indicated that market valuations were at a premium.
What are the fund managers going to do to reduce the losses caused by the decline in markets?
- Our portfolios have already been positioned defensively for some time now and this has had the effect of tempering some of the losses that investors have been exposed to, and importantly, will create a stronger foundation from which to grow asset values going forward.