The good, the bad and the ugly
Below are the key factors that have influenced investment markets in recent weeks, followed by our current position. You can download the full report of our detailed review of the markets and positioning of our portfolios...
December was another tough month for global equities after the relative respite seen in November as the prospect of fading US policy support in 2019 together with the US/China trade conflict, reduced monetary stimulus and global growth concerns took their toll on investor confidence.
Best & worst sector performance
Developed equity markets were the hardest hit over the month. US and Japan stocks, in particular, suffered the steepest declines. Turmoil in global equity markets saw a flight to perceived safe-haven assets such as gold and bonds (particularly Government bonds) which saw the strongest returns over the month.
No place to hide in equity markets
European and UK markets also pulled back although to a lesser extent over the month, hit by global growth concerns and the ongoing Brexit debacle.
Asia and Emerging Markets – Getting warmer.
Whilst both the Asia Pacific and Emerging Market indices posted losses over the month they were decidedly more muted than those felt in the developed markets.
Little differentiation across sectors
Over the period there was little differentiation between sector performance globally. The best performer was the utilities sector only down 2.5%, followed by the materials sector only down 4.1%.
Bonds were back
Bonds were the best place to be in December (other than Gold) as investors sought out safe-haven assets.
The best of the rest
Commercial Property continued to grind out marginal gains whilst providing a good income and is proving a good bedrock within our cautious and balanced portfolios.
We do not try to second guess short-term market movements, although less demanding valuations following the market falls do provide more opportunities for those who can invest without being fixated on short-term market fluctuations.
Download Full Asset Views Report