Portfolio managers at Goldman Sachs Asset Management have used the recent selloff in global stocks caused by the coronavirus as an opportunity to take positions in a range of companies focusing on everything from concerts to cosmetics.
As stocks tumbled to their worst weekly performance since the financial crisis, the firm's $60 billion portfolios bought shares of Japanese cosmetics-maker Shiseido Co Ltd and events promoter Live Nation Entertainment, as well as companies in the travel and hotel sector, Katie Koch, Goldman Sachs' global co-head of equities for its asset management business, said in an interview with Reuters.
"We recognize the seriousness (of the coronavirus concerns), and we would never celebrate a sell off of this magnitude," she said. "But this dislocation provides active managers a great opportunity."
The S&P 500 fell for the seventh straight day on Friday and the benchmark index suffered its biggest weekly drop since the 2008 global financial crisis on growing fears the fast-spreading coronavirus could lead to a recession, although stocks cut losses at the end of the day's session.
Koch said the firm's clients have largely remained sanguine throughout the selloff, deploying more cash this week into the bank's active management portfolios.
"We have not seen great outflows from our clients. We have seen higher engagement- more people calling and asking questions. This week we are going to end up in pretty strong net inflows into our active portfolios from clients globally," she said. The firm's purchase of shares of Shiseido is a bet that demand from Chinese consumers for the high-end brand will continue after the outbreak passes, Koch said.
The investments in shares of hotel and cruise companies reflect expectations that millennial spending on travel over the long run will trump the short-term hit the sector is experiencing due to coronavirus fears, she said.
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