Investors have been keeping an eager eye on central banks throughout December, after the Bank of England raised UK interest rates for the first time in ten years in November 2017. In the end, UK rates remained on hold at 0.5% in December, but across the pond, US rates rose to 1.50%, on the back of various announcements that indicate the US economy is in a healthy condition as we enter 2018. Elsewhere, the European Central Bank and Bank of Japan kept their interest rates on hold at 0% and -0.10%, respectively.
With regard to stocks and shares, the leading UK stock market saw very strong performance. This was helped by rising copper, gold and oil prices which have a big impact on some of the largest companies in the UK, like BP and Rio Tinto.
Shares in companies that own UK commercial property performed particularly well in December, on average gaining almost +9% in value. Interest in the real estate sector has been revived recently by some professional investors speculating that low property prices due to Brexit could create opportunity for mergers and acquisitions. This was evidenced by Hammerson, one of the largest shopping centre owners, announcing in December that it was buying a smaller rival.
In currency markets, the Pound strengthened against most major currencies but remained muted against the US Dollar, up by just a fraction at +0.09%. The Pound’s biggest gain was against the South African Rand, where it rose +10.72% for the month.
Investment type performance breakdown
All investment types in our Plans ended the final month of 2017 higher than the previous month: Commodities +2.47%, private equity +2.44%, bond investments +0.64%, property +8.70% and shares +2.15%.*
December proved to be a positive month with all our Investment Plans showing healthy returns. Of course, the value of your Plan can go down as well as up, but we are cautiously optimistic about investing conditions for 2018 and will be monitoring and managing your Plans for you every day, as always.
*Figures used for each investment type are an average based on the Wealthify 'Confident' investment style.
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The comments and opinions expressed in this article are the author's own and should not be taken as financial advice from Wealthify.