Effects of Covid-19 related crises and their effects on the investment industry in Brazil, Canada, Mexico, US.
We provide a report on CFA Institute members’ responses to this survey. In this report, we focus first on their perspectives on how they and others in global investment markets were responding to the market and whether the turmoil would upset the trend in recent years toward increased investor use of index and exchange-traded funds.
Included in the survey was a consideration of how trading market volume was affecting different asset classes across different types of markets.
The report then looks at how the regulatory system functioned during the turmoil, followed by members’ recommendations on what market regulators should or should not do in these kinds of crises. We conclude with a short list of policy responses as the effects of the joint crises (we interchangeably use the terms “crises” and “crisis” to describe recent events) ease and economic activity resumes a modicum of normalcy.
We focus this report on four nations in the Americas: the United States, Canada, Brazil, and Mexico. No other market in the region generated a statistically significant universe of responses to create an accurate report. And while members in Mexico responded in higher percentages than members in other markets in the region, their collective numbers were limited to the point that the margin of error for Mexico was 13%, above the 10% threshold CFA Institute set as sufficiently indicative to include in the general survey results. This report includes those members’ responses, regardless.
Methodology
Rounding out the region, nearly 5,500 responses, or 41% of the global total, came from members located in the United States. Canadian members accounted for 1,615 responses, or 12.2% of the global total. Latin American members provided 427 responses, with 147 coming from Brazil, 59 from Mexico, and the remaining 221 spread across the region.
Key Findings or Summary of findings
Members’ views of the crises’ effects on financial markets generally were in many cases dependent on where members are domiciled. Those in the United States and Canada differed—sometimes substantially—from Brazil and Mexico (remember, Mexico’s data have a margin of error greater than 10%), whereas the responses of Canadian and US members mirrored closely the views of the overall membership on whether market volatility has or will change strategic asset allocations, Brazil and Mexico hinted at significant changes.
In particular, members in Brazil and Mexico expressed a more binary response to the volatility in the markets than did members in Canada or the United States, as shown by the much lower percentages of members from Brazil and Mexico expecting no significant changes to their investment strategies or choices. Likewise, members from the two Latin American nations were at least twice as likely to anticipate significant changes to their investment strategies and choices than were their fellow members in the United States and Canada.
For a more detailed analysis on the dozens of other questions posed, please consult the survey.