It’s been a challenging start to 2018 for financial markets and March was no exception, once again testing investors’ resolve. However, recent economic data from the Purchasing Managers’ Index – a barometer for the health of the manufacturing sector – hints towards more positive news for the global economy, particularly in Europe, UK and the US. Whether or not this helps turn around the fortunes of financial markets, remains to be seen.
Frictions between the US and China have sent significant waves across global markets this month, as experts try to make sense of what the hefty trade tariffs proposed by both sides might mean for the world economy.
Trade disputes cause uncertainty and although no tariffs have actually been applied by either side yet, it has cast a shadow over market confidence and has likely made even the most experienced investors somewhat nervous. The outcome is difficult to predict. US Government is now going through a 60-day public consultation on their tariffs and China says their own will only take effect if the US make good their threat. So, although it’s sensible to be cautious right now, so far nothing has actually changed, and who knows, Trump may yet perform another of his U-turns.
Tech stocks have had a pretty rough month too, partly off the back of some fairly high-profile issues, like Facebook (who it emerged have been doing some sharing of their own) Tesla (whose business model is showing signs of cracking) and Trump’s feud with Amazon. The increasing prospect of regulatory pressure on the sector also has alarm bells ringing with investors, causing significant drops in the value of many tech stocks and shares. US markets took the brunt, down more than -2.5%, while the UK’s FTSE 250, a comparatively less globally-focused market, ended down just -0.87%.
In currency markets, the Pound strengthened against most major currencies, including against the US Dollar where it gained +1.84%.
Investment type performance breakdown
Inevitably, most of our investment categories ended the month down, although bonds and property bucked the trend, providing some positive news for investors. Commodities fell by -2.80%, private equity -4.77%, and shares by -3.19%, while bond investments rose slightly by +0.72% and property investments provided Plans with +4.33% growth.
Summary with Plan details
On the face of it, another disappointing month, however, we’re confident with the way that we’ve positioned Investment Plans, given current conditions. Our investment team is considering a small additional rebalance and we’ll let customers know as soon as they do. In the meantime, our message remains the same – ride out the storm and avoid knee-jerk reactions. Months like these are par for the course with investing. If something goes up in a straight line, don’t trust it!
*Figures shown are based on a medium-risk (Confident) investment Plan.
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