Whitechurch Asset Views - August 2018
A positive month for stockmarket investors
Having seen signs of investor nervousness in June, last month saw investors regain their appetite for risk, and it proved to be a sunny climate (matching the weather) for most global stockmarkets. The overall result was a rise of 3.1% for the MSCI World Index.
Low volatility despite ongoing uncertainty
Despite political upheaval at home and abroad, continuing to dominate headlines and causing an uncertain backdrop, investors were in a relaxed mood and stockmarket volatility in July was very subdued.
UK stockmarkets subdued
Following a strong recovery in the second quarter and improving global investor sentiment the returns from the UK stockmarket were tempered, over the month, by Brexit worries.
European stockmarkets show recovery
In terms of overseas exposure, having underperformed for much of 2018, European stockmarkets were at the forefront of performance in July.
Currency diversification boosts performance
Currency continued to influence market returns and a weakening of the pound versus other currencies (particularly the dollar) enhanced returns for UK investors with overseas exposure.
Mixed returns from bond markets
Away from stockmarkets, there was a mixed performance from bond markets.
The best of the rest
Commercial Property had another month of providing solid gains. The asset class is again displaying the two attributes we seek – attractive yields compared to Government bonds; and a lack of correlation with equity and bond markets.
The recent political turbulence is just background noise in our view and does not alter our investment outlook.