Is there something systematically wrong with Victoria's COVID-19 performance?

Christopher Joye

Coolabah Capital

Our data scientists’ analysis of Victoria's COVID-19 infection trajectory has unearthed a disturbing finding: it would appear that since April our southern neighbour has systematically underperformed the rest of Australia's key conurbations in terms of its ability to contain this wicked virus and flatten their curve. 

The first chart below is a screenshot from our internal, real-time system that tracks the cumulative number of daily infections. This highlights that Victoria has been struggling to contain COVID-19 since the start of April in striking contrast to the rest of Australia, which has done a brilliant job of flattening their curves. (Click on the image to view a higher resolution version of it.)

The second screen-shot from our systems presents the growth in cumulative infections on a state-by-state basis in logarithmic terms, and it shows a similar story: there is something in the Victorian experience---either its policy reaction function or perhaps the composition of its population---that has prevented it from flattening the COVID-19 curve like all other states. Put differently, Victoria's curve has been increasing, not flat-lining, for a number of months now in contrast to the other major metro markets.

If we then look at the daily change in the number of new infections, one can see that Victoria (blue line) has reported persistently higher cases than NSW (brown line), which is the comparison in the first screen-shot below, and all other states, which are included in the second screen-shot.

While I might want to beat-up on my Victorian brethren, when we turn to consider our real-time Google mobility data, on almost every score Premier Andrews has been a lot tougher than the other states. You can click on the screen-shot below to see our Google activity data in more detail. Victoria is the purple line and has experienced, for example, lower retail/recreation activity, public transport usage, workplace attendance, participation in parks, and longer stays at home. (The residential screen tracks the duration of time that people spend in their homes.) 

It therefore remains something of a puzzle as to why the Victorians have been such poor COVID-19 performers. I suspect it has to do with the composition of their population, and predispositions among certain cohorts of individuals that have higher COVID-19 transmission propensities through their personal interactions. This makes sense given Victoria's recent outbreaks have been reportedly focussed on specific family gatherings. 

Get investment insights from industry leaders

Liked this wire? Hit the follow button below to get notified every time I post a wire. Not a Livewire Member? Sign up for free today to get inside access to investment ideas and strategies from Australia’s leading investors.

General Disclaimer: Past performance does not assure future returns. All investments carry risks, including that the value of investments may vary, future returns may differ from past returns, and that your capital is not guaranteed. This information has been prepared by Coolabah Capital Investments Pty Ltd (ACN 153 327 872). It is general information only and is not intended to provide you with financial advice. You should not rely on any information herein in making any investment decisions. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. The Product Disclosure Statement (PDS) for the funds should be considered before deciding whether to acquire or hold units in it. A PDS for these products can be obtained by visiting Neither Coolabah Capital Investments Pty Ltd, EQT Responsible Entity Services Ltd (ACN 101 103 011), Equity Trustees Ltd (ACN 004 031 298) nor their respective shareholders, directors and associated businesses assume any liability to investors in connection with any investment in the funds, or guarantees the performance of any obligations to investors, the performance of the funds or any particular rate of return. The repayment of capital is not guaranteed. Investments in the funds are not deposits or liabilities of any of the above-mentioned parties, nor of any Authorised Deposit-taking Institution. The funds are subject to investment risks, which could include delays in repayment and/or loss of income and capital invested. Past performance is not an indicator of nor assures any future returns or risks. Coolabah Capital Institutional Investments Pty Ltd holds Australian Financial Services Licence No. 482238 and is an authorised representative #001277030 of EQT Responsible Entity Services Ltd that holds Australian Financial Services Licence No. 223271. Equity Trustees Ltd that holds Australian Financial Services Licence No. 240975. Forward-Looking Disclaimer: This information may contain some forward-looking statements. These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or result expressed or implied by such forward-looking statements. Coolabah Capital Investments Pty Ltd undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to rely on forward-looking statements.

Portfolio Manager & Chief Investment Officer
Coolabah Capital

Chris co-founded Coolabah in 2011, which today runs over $8 billion with a team of 26 executives focussed on generating credit alpha from mispricings across fixed-income markets. In 2019, Chris was selected as one of FE fundinfo’s Top 10 “Alpha...

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.