FOR IMMEDIATE RELEASE
Minneapolis, MN, June 12, 2020 – Magni Global Asset Management LLC (Magni) just completed an analysis of how each country’s response to COVID-19 impacted equity valuations. The equity markets of investible countries with a better response to the pandemic outperformed the equity markets of countries with a worse response to the pandemic by 726 bps on a YTD basis through the end of May.
In addition to the tragic human toll from the pandemic, the economic systems of most of the world have been disrupted. One measure of the economic disruption is the value of public equities. Outside of the U.S., there are 45 countries where a country-wide ETF exists. These ETFs are a reasonable measure of the performance of each country’s equity markets.
The response to the pandemic varies widely across these countries. The Global COVID-19 Index measures the effectiveness of a country’s response. This ranking was used to sort countries into two groups. The top 22 countries with better responses returned on average -15.79% during 2020 YTD through the end of May. The remaining countries fell on average -23.05% during the same period. The difference is 726 bps.
“Magni believes the quality of governance is important investment information. In addition, better governance should enable a better response to the pandemic. Magni expected a difference in performance, though the size of the difference is bigger than we expected,” said Kurt Lieberman, CEO of Magni. While past performance is not a predictor of future performance, Magni will be tracking to see whether the gap continues or begins to close over time.
About Magni Global Asset Management
Magni Global Asset Management LLC is a leader in corporate governance research on countries and companies, focusing on the behavior of the entity. Magni developed the Sustainable Wealth Creation principles to evaluate country-level governance. The principles are based on widely accepted economic concepts regarding the accounting, legal, regulatory, adjudicative, and economic infrastructures of countries. Countries with strengths in these areas provide environments conducive to effective corporate governance. Magni’s extensive database contains research on countries across 280 qualitative factors over 17 years.
Magni established the Sustainable Value Creation principles to evaluate public companies. These principles were applied to analyze 468 qualitative factors on each company. In addition to researching each company’s relationship with its shareholders and employees, the assessment also includes relationships with customers, suppliers, competitors, and the communities in which a company operates.
For more information, please visit www.magniglobal.com, or follow us on Twitter @MagniGlobal.
Brad Hanson, Managing Director
Magni Global Asset Management
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