China, South Korea and Taiwan — among the first countries to be impacted by the coronavirus — were top performers among both emerging and developed markets last week. While they remained below the red line, the three countries recorded the smallest six-month losses (below 10% for each). All developed countries saw larger losses than the three Asian countries, except Denmark. In fact, many western European countries, such as Italy, Spain, France and the UK posted six-month losses larger than 20%. For more details on why Denmark fared better during this crisis, see our blog post, Lockdown, Partial Lockdown, or No Lockdown – and the Impact on Equity Markets.
China became one of the least risky countries, with its risk nearing 30%, while Taiwan and South Korea were in the middle of the pack. In contrast, the US became riskier than all three Asian countries, with its risk exceeding 40%, as measured by Axioma’s Worldwide short-horizon fundamental model. Colombia remained the riskiest country at nearly 70%, while Peru and Mexico were the least volatile countries as of last Thursday.
See graph from the Equity Risk Monitors as of 14 May 2020: