The Month in a Minute
With US shares continuing to push higher in August, all Wealthify Original Plans outperformed their benchmark, with Ethical Plans falling a little behind theirs. The prospect of an interest rate cut in September strengthened the markets, while geopolitical uncertainty, trade tensions, and AI doubts added a general air of caution.
Broadly positive returns in August, thanks to improving interest rates and a strong earnings season.
August began with some uncertainty, as new tariffs were applied to a broad range of U.S. trade relationships.
Things turned around quickly, however, with the release of US jobs numbers revealing notable weaknesses in the American labour market — spurring hopes of an interest rate cut in September.
This prospective cut not only boosted positive sentiment throughout August but continues to shape the mood as we move through September. Closer to home, the Bank of England’s decision to reduce interest rates was the big story for investors.
UK markets broke into all-time highs initially, with a drop later in August due to financial sector concerns of a windfall tax on lenders. Still, they finished the month positive overall.
In Asia, markets saw strong returns, driven by the US-Japan trade deal at the end of July, alongside generally positive economic data.
Overall, August’s positive momentum came from second-quarter earnings season. Despite muted predictions, several S&P 500 companies beat analyst expectations — a true testament to corporate resilience.
Diving a little deeper into Wealthify Plan performance, Original Plans saw boosts from US, UK, and European shares, with only slight detractions from both UK infrastructure and mid-sized companies. Despite their mixed performance, bonds still added to overall returns.
Ethical Plans struggled compared to Original, but many regions still showed good returns, especially in Japan and Emerging Markets.
Going forward, continued caution is required, with the broader landscape remaining uneven as a result of ongoing geopolitical and trade uncertainty.
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