In broad terms May saw a return to a risk off environment with Fixed Income performing well and equity markets giving up some of their strong gains year to date. Performance of some of the main indices is summarised below:

All figures are based on bid to bid prices with income reinvested, in Sterling terms)

Sentiment drove markets over the period and this was once again dictated by speculation on the progress (or lack of it) in continued trade talks between the US and China. In his latest spat, President Trump threatened to raise tariffs to 25% on around $200 billion worth of Chinese goods causing investors to worry about the potential impact on global growth. More recently, threats have also been made to Mexico which is less of a concern to investors but continues the tone.

During the month, our portfolios have moved broadly in line with their benchmarks.

Portfolio Changes

We made a number of changes to our portfolios at the end of the month.

We have sold the Invesco Perpetual Corporate Bond fund (Cautious/Balanced portfolios) based on performance grounds and how the fund invests. We are reinvesting the proceeds between our Gilt (iShares) and Strategic Bond (Henderson) holdings to provide a combination of protection and flexibility within the fixed interest area.

Secondly, we have sold out of the Standard Life UK Equity Unconstrained fund after a very poor 2018. The fund has been exposed to more domestic focused business, outside of the FTSE 100, and performance has been impacted over Brexit concerns. We have now sold out of the fund given that the fund has not rallied during 2019 as we would have expected and indeed as most of our other UK funds have. These proceeds are being added to our existing positions in the JO Hambro UK Dynamic and Liontrust UK Smaller Companies funds to maintain the UK exposure.

Next, we have sold the Henderson Emerging Markets Opportunities fund following the resignation of the fund manager and significant outflows from the fund as a result. Proceeds are being reinvested on a like for like basis into the UBS Global Emerging Markets Equity fund.

Finally, we have sold our holding in the JO Hambro Japan fund. The fund invests with a value style and whilst this particular style has been out of favour, the performance of the fund has also been disappointing. We have reinvested the proceeds into the GLG Japan Core Alpha fund to provide a similar value, large cap bias and continue to see Japanese equities as offering good value.

All of the changes to our portfolios have been made with the aim of generating higher returns whilst maintaining the required diversification and management of risk across the various risk and objective profiles.