April 2021 saw the world continue to build on the progress made by the vaccine roll-out, with over 50 million Covid-19 vaccinations issued in the UK so far, and Europe’s vaccination program accelerating. We’ve also seen UK and US figures show 51% and 44% of their populations (respectively) receiving at least one dose, and are leading the way in market performance for April.
President Biden’s first 100 days have now passed, and there were plenty of changes carried out (or undone). One of the most significant measures is that further US fiscal stimulus packages appear likely. This, combined with the anticipation that increased household savings over 2020 will lead to increased spending in 2021, is helping to support global markets. Although inflation and ‘overheating’ continues to fill the headlines, Central Banks remain committed to assisting the economic recovery and signal their content with inflation increasing above the 2% level, as long as this rise is short-lived, avoiding the need to raise interest rates.
To continue this string of positive news, data released in April showed the US added 916,000 jobs in March, the unemployment rate declined to 6%, with the leisure and hospitality sector seeing the strongest gains. In the UK, the manufacturing sector continues to deliver positive surprises against economists’ robust estimates, continuing the strong upward trend, and the UK Service sector also benefited from those enjoying the gradual lifting of lockdown restrictions.
Markets
April was generally positive, with most markets performing well. US (+5.24%), FTSE-250 (+4.55%), FTSE-100 (+3.82%), Asia Pacific excluding Japan (+2.77%), Emerging Markets (+2.37%) and Europe (+1.81%) all saw gains. Japan (-2.72%) fell amid rising coronavirus concerns, albeit at low levels, with the implementation of emergency lockdowns three months before the Olympics is due to be held there.
The gains in most assets held in foreign currency were increased in our Plans due to the weakening of Sterling. However, this was not the case in the US, where Sterling strengthened against the US Dollar - we’ll discuss this further below.
Currency
An improvement in investors’ risk appetite in April saw the British pound decline against most major currencies, as markets embraced the brighter outlook. The pound fell against the Euro (-2.18%) and the Japanese yen (-1.00%), but rose against the US dollar (+0.28%).
Investment type performance breakdown
Shares rose (+2.37%) with their performance benefiting from the general weakening in Sterling compared to many of the major global currencies. Increasing expectations about accelerating inflation continued to support the property sector (+5.48%). Further stimulus and economic recovery also led to bond prices rising as yields fell, which was positive for bonds in April (0.34%).
Summary with Plan details
Our Plans with a higher allocation to shares and property, such as our Adventurous Investment Style, benefited from the positive returns from these asset classes in April. Plans that hold more bonds, such as our Cautious Investment Style, would have seen the growth in shares and property boost the returns seen in bonds.
Our Investment Team continue to actively monitor the financial markets and their impact on your Plan, and as always, we are ready to act in your best interests to events as they unfold.
Past performance is not a reliable indicator of future results.
Please remember the value of your investments can go down as well as up, and you could get back less than invested.
