Market Update – 28 May 2020

We would like to keep you updated on how financial markets are performing throughout the covid-crisis.

Since the sharp drop in global markets during March, we have seen a consistent recovery from these lows, with the various measures put in place by global governments helping to steady investment values and rebuild market confidence. We have seen a large jump in share prices in both Europe and the US, and global bond markets have been stabilised by quantitative easing measures and cuts in interest rates. Oil prices have also increased in recent weeks, a reaction to the gradual reopening of industry following the cap on output by Saudi Arabia and Russia.

This means that around two-thirds of the losses initially suffered in March should now have been gained back.

With such a strong recovery in recent months, investment managers are diversifying their assets and carefully considering protection of capital along with opportunities for growth in these markets. Allocations in UK equities and other global equities were generally increased in March/April, seizing on the opportunity to increase exposure at the exaggerated low prices available and to benefit from the recovery when this occurred. Now fund and portfolio managers are generally rebalancing to reintroduce more fixed interest and alternative assets to help diversify and obtain a truly balanced portfolio. The market outlook is still positive for the long-term and the general opinion is that there is still more value to be gained, as we move out of lockdown and economies start to rebuild over the coming months.

Check how your investments are performing

If you have existing investments or pensions you should be reviewing how these are invested and performing at this stage. A properly managed investment portfolio should be able to limit losses in volatile times and excel in the upturn. You should also be carefully assessing the amount of risk that you are taking with your investments and ensuring this is in line with your objectives and requirements.

Any person in a position to invest capital should also be assessing the opportunities available, as there are good opportunities for long-term growth with fund prices still low currently.

If you would like a free consultation, including analysis of your current investments, please contact us to arrange a call with one of our advisers.

Performance Figures

Below are the mixed-investment sector performance graphs for the last 5 years and 6 months, with the 6 month chart showing the full impact of the covid-crisis on market performance. There is also a 10-year performance table with full details about the performances of these sectors.

UT Mixed Investment 0-35% shares (blue) = Cautious to Moderate Risk

UT Mixed Investment 20-60% shares (red) = Moderate Risk

UT Mixed Investment 40-85% shares (black) = Moderate to Adventurous Risk

(information gathered today using FE Analytics – prices as of close of yesterday)

 

6 month performance chart

 

 

 

 

 

 

5 year performance chart

 

 

 

 

 

 

10 year performance table

 

 

 

 

 

As you can see from the table and graphs above, we are now in roughly the same position as one year ago, which is reassuring.

We understand that lots of businesses and income have been affected by the lockdown in this country, and as such you may need to access investment capital in case of emergency. While selling and withdrawing monies when markets are down is not normally advisable, we understand in some instances there may be no other option. You should also note the well-publicised government support in place, such as grants, subsidies and loans on favourable terms (borrowing can be very cost effective with interest rates so low).

If you would like further information or advice then please contact us.