Markets began 2018 in the same broadly positive fashion they ended last year, particularly emerging markets and Asia. One exception was the UK. This was partly due to the strength of sterling, which is bad news for UK-listed companies whose profits are in dollars.
If sterling strengthens then US dollar revenues, once converted back into sterling, are worth less than they would have been. As a result, returns for UK investors from the strong US market were largely wiped out. President Trump seems set to continue talking down the dollar to boost manufacturing exports from the US and bring jobs back home.
Markets began 2018 in the same broadly positive fashion they ended last year, particularly emerging markets and Asia.
In contrast to equity markets, bond markets performed poorly in January. This is due to expectations of higher interest rate rises as a result of higher global growth and inflation. This negativity crossed to equity markets at the end of the month with the US leading a global sell-off.
Read more about how Sheldon MacDonald, Deputy Chief Investment Officer, positioned the Architas Multi-Asset Blended Fund range last month. Or, take a look at the current asset allocation split of the Architas Multi-Asset Passive Fund range, both in shareable client-friendly PDFs.
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