In the UK, the Bank of England (BoE) left interest rates on hold at 0.5%. With political uncertainty around Brexit and inflation cooling, there is less urgency to increase interest rates. In the US, unemployment fell to 3.9% which is the lowest it’s been since 2000. In the Eurozone, political tensions have increased, with Italy struggling to form a government and the Spanish Prime Minister receiving a vote of no confidence, leading to his resignation. Finally, tensions between the US and Iran saw the price of oil rise to its highest level since 2014.
After a month of ups and downs, European markets ended May slightly higher. In the US, the main stock market gained 2.4%, partly due to news concerning US companies’ earnings being better than expected. In the UK, energy companies and exporters benefitted from a weaker Pound which saw stock and shares of large UK public companies on average rise by 2.8%.
Concerns surrounding Brexit and the next interest rate increase perhaps being further away than people thought, caused the Pound to fall against all major currencies. The Pound dropped 0.20% against the Euro, fell 4.0% versus the Japanese Yen and declined 3.5% against the US Dollar. However, the Pound gained 7.1% against the Turkish Lira - good news for those going to there on holiday!
Investment type performance breakdown
Most investment types ended the month higher with only property producing negative results: commodities +5.19%; private equity +3.95%; bond investments +0.57%; property -0.53%; and shares +1.39%.
Summary with Plan details
Despite seemingly negative news reporting this month, broadly speaking, financial markets have shown some resilience. All our investment plans gained in May, demonstrating the benefit of having lots of different investments in our plans, also known as diversification. Our investment team remain focused on your plans and are ready to act as opportunities or situations arise.
Figures shown are based on a medium-risk (Confident) investment Plan.
Your investments can go down as well as up and you could get back less than you put in.