Whitechurch Asset Views - September 2018
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...
US Stockmarkets were the only game in town in August
US stockmarkets posted another month of strong gains due to robust economic news-flow. However, all other major global regions showed negative returns.
Mixed sentiment across the globe
Although investors in US were in a relaxed mood, markets in Europe and Asia were not as calm and there was significant volatility in emerging markets.
Summer doldrums for UK investors
The UK stockmarket fell back during the month. Although Brexit noises remained a feature, it was weak performance from oil and mining sectors which were key detractors to the UK market.
The longest bull market since World War II
During the month the US bull market became the longest on record since World War II having avoided a 20% or more decline since March 2009.
Currency diversification remains a positive
Strong US economic data saw an extension of the rally in the dollar and Brexit fears pushed the pound lower versus the yen and euro. We continue to extol the virtues of holding well-diversified international exposure.
A better month for bond investors
Increased nervousness amongst investors (outside of the United States) saw a better month for most areas of bond markets but Emerging Market debt was hit hard by falling currencies.
Political uncertainty at home and abroad will remain a feature but is largely background noise in our view and does not alter our investment outlook.
Our view remains that interest rate increases are likely to be marginal and that a well-diversified portfolio can continue to provide cash-beating opportunities in a number of areas for those prepared to ignore short-term noise, focus on valuations and take a longer-term perspective.