One of the world's leading asset managers has been buying shares during the coronavirus pandemic.
According to a note out of T. Rowe Price this morning, the asset manager is leaning into the market weakness.
Opportunities aplenty.
Portfolio managers at T.Rowe Price believe that indiscriminate selling of shares by investors during the pandemic has created a buying opportunity.
The asset manager explained: "Amid the coronavirus-related sell-off in risk assets, we have incrementally added to equities over the month as the broad-based, indiscriminate selling has created opportunities to buy into quality companies at discounted levels."
Though, it is worth noting that T.Rowe Price does not expect this to be a smooth ride. It isn't jumping in feet first and hasn't ruled out further declines.
"We are averaging into positions as volatility is likely to persist over the near term and markets could revisit recent lows," it added.
The asset manager hasn't revealed what it is buying, but I feel the likes of BHP Group Ltd (ASX: BHP), SEEK Limited (ASX: SEK), and Telstra Corporation Ltd (ASX: TLS) fit the bill for high quality companies trading at discounted levels.
What about the Australian economy?
Although it acknowledges the destruction the pandemic is causing, T.Rowe Price spoke positively about the way Australia has responded to it.
It said: "Never before have we seen the recent enforced pullback in global economic activity. We think containment measures designed to slow the spread of the coronavirus will generate significant short-term economic pain, and the longer they are in place, the larger the negative impact will be."
"However, Australia has taken significant strides so far to limit potential downside pressures. The economy entered this environment in a very strong fiscal position and with low levels of debt, which has given the government significant firepower to support the domestic economy. It has already announced three fiscal packages which together represent around 10% of GDP."
The asset manager also praised the Reserve Bank for supporting the financial system during these difficult times.
"The RBA has also played an important role, cutting interest rates and providing liquidity to support the functioning of the financial system. We expect fiscal and monetary support will continue to be ample until the situation appears under control," it said.
Where to invest?
T.Rowe Price notes that the Australian dollar is at its weakest level in nearly two decades.
It believes this could cushion the impact of an economic downturn and also presents interesting investment opportunities.
Once again, no companies were named, but there are a good number of shares which fit this investment thematic for investors to take a look at.
The likes of artificial intelligence company Appen Ltd (ASX: APX), gaming technology company Aristocrat Leisure Limited (ASX: ALL), and infection control specialist Nanosonics Ltd (ASX: NAN) all generate significant revenue in the United States and would benefit from a lower Australian dollar.
Foolish Takeaway.
I think that T.Rowe Price makes some excellent points and would suggest investors heed its advice by buying shares but not going all in immediately.
