It has been a busy month for financial markets with a number of ‘events’ increasing volatility and yet again politics has taken centre stage.
Theresa May’s announcement for a snap General Election on 8th June came out of the blue and resulted in our equity market falling sharply on the day, with Sterling appreciating against the Dollar and Euro.
The following week saw the first round of the French elections with voters backing Marine Le Pen and Emmanuel Macron for the final vote. Markets across Europe rallied on the result with poles predicting a victory for the more pro-European candidate, Macron.
Despite the increased volatility and some weakness in share markets, as summarised below, our performance generally across the month has been slightly positive, helped by the strong returns from UK mid and smaller companies where we have significant exposure.
|(all figures are based on bid to bid prices with income reinvested, in Sterling terms)|
We are in the process of making some changes to the portfolios as detailed below.
Fixed Interest – we will be selling our holding in the iShares 0-5years Gilt ETF and adding these monies to the Henderson Strategic Bond OIEC (and also the Artemis Strategic Bond Unit Trust for Cautious portfolios). The short dated Gilts provided more cash-like returns and we feel that adding to our corporate debt exposure will offer a greater return potential over the medium term.
Europe – we will be adding slightly to our European equity exposure based on competitive valuations and long term growth potential. We will be reducing our exposure to the Henderson UK Absolute Return OEIC by 1% and introducing a new holding in the form of the Marlborough European Multi-Cap Unit Trust.The fund will provide exposure across different market capitalisations (large, medium and smaller companies) and complement our existing holdings.
North America – for Adventurous portfolios we will also be reducing exposure to the Henderson UK Absolute OEIC by a further 2% and adding this to existing holdings in the Schroder US Mid Cap Unit Trust and Threadneedle American Smaller Companies OEIC.
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