The Month in a Minute
Despite continued geopolitical volatility, June was all about US shares, which surpassed their previous all-time highs. In terms of Wealthify performance, lower-risk Original and Ethical Plans outperformed their benchmarks, with higher-risk plans slightly underperforming theirs.
June dominated by significant – but ultimately short-lived – Middle East escalation, as well as easing trade tensions and cautious central bank policies.
Naturally, however, it wasn’t all plain sailing for Uncle Sam.
The mid-month conflict between Israel and Iran reached a crescendo, with US involvement causing significant market volatility and a spike in oil prices.
However, a prompt ceasefire led to a de-escalation of tensions and markets reached all-time highs. And, if ever there was the case for time in the market, not timing the market, this was it.
Emerging Markets and Asia Pacific also fared well.
The former was boosted by a stronger US dollar, with both regions bolstered by strong performance from China, where investors welcomed the announcement of a trade deal that landed on a 55% tariff (inclusive of previous levies).
On the subject of tariffs, the end of President Trump’s initial 90-day pause is looming , the run-up to which saw mixed European returns and the UK finishing slightly down.
And, with letters going to foreign leaders outlining the tariffs that will apply from August 1st, what happens next in the USA is anyone’s guess.
At Wealthify, we’re taking a glass-half-full approach for investors.
On one hand, a recent report indicated the strength of the US economy.
On the other, any perceived economic weakness only increases the likelihood of a cut in interest rates, which is also a positive. And, as is often the case, these cuts may be the determining factor in shaping the short-term financial picture.
The Federal Reserve (the Fed), for example, held interest rates in June for the fourth consecutive meeting. Despite some signs of cooling inflation, policymakers adopted a cautious stance to assess the impact of President Trump's policies — especially tariffs. As a result, the Fed is very much in a wait-and-see mode.
In the UK, the Bank of England also held firm at 4.25% (although a split vote indicated that some members favoured a cut). And, coupled with inflation easing in May, expectations for a potential rate cut by August have been reinforced.
Regardless of the outcome, rest assured that all Wealthify Plans are diversified and flexible enough to take advantage of any opportunities that present themselves.
With investing, your capital is at risk. Please remember the value of your investments can go down as well as up, and you could get back less than invested.
Wealthify does not provide financial advice. Please seek financial advice if you are unsure about investing.
Your tax treatment will depend on your individual circumstances, and it may be subject to change in the future.
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