Wealthify Performance - December 2019

Our investment team look at how the markets performed in December
Wealthify Performance - December 2019
Reading time: 4 mins

 

December 2019 saw the Conservative party win the UK election with the largest majority in over 30 years.

What now? With such a strong majority, they should be able to move forward in the direction they feel is best without too much friction. Prime Minister, Boris Johnson, has said he is intending to leave the European Union by the end of 2020, so until further information is available, that would appear to be the most likely outcome.

Turning our attention to the United States, consumer spending data shows that the US economy is in good health, irrespective of the ongoing trade tiff with China. Over the holiday period, figures from Mastercard showed total US retail sales between November 1 and Christmas Eve increased 3.4 per cent compared to the same period a year ago, rising to almost $880bn.

Looking across to the Eurozone, Germany’s outlook for the economy rose to its highest in the last six months. Despite slow growth expected at the start of the year, business leaders have confidence that the German economy has been through the worst, and green shoots should start showing during 2020.

Looking ahead to what’s in store for the coming year, there are signs of resilience and optimism from a number of the major economies, and despite some of the market uncertainty of 2019, we hope to see another year of positive returns in 2020.


Markets

Thanks to what is known as a Santa Claus rally, December delivered positive returns for every global stock market we follow.

The FTSE 100, representing the UK’s largest public companies, produced returns of +2.78%. This was largely driven by the conclusive election result. Investors typically favour certainty, and with a majority Government now in place, businesses can now plan for the future – something they were more reluctant to do while the Brexit outcome remained so uncertain.

The rise seen in UK share prices was underpinned by the largest amount of purchases of UK share funds since the 2016 Brexit referendum.

U.S. shares also performed well in December, thanks to technology and financial companies, closing +3.01%.

At an individual company level, Apple shares continue their march higher, with another +9.88% return, ending the year +88.97%. The move means Apple is once again crowned the most valuable US company, worth £1 trillion - more valuable than the entire US energy sector.

All other regions also gained; Asia Pacific (excluding Japan) was up +6.50%, Emerging Markets +7.35%, Europe +1.24%, and Japan +1.69%.

Asia Pacific (excluding Japan) and Emerging Markets were the two strongest performers in December. Typically, these regions perform better when there is optimism about the health of the global economy.


Currency

In December, the Pound saw a post-election rally as it strengthened against all major currencies; +0.78% against the Euro, +1.71% against the Japanese Yen, and +2.50% against the US Dollar.


Investment type performance breakdown

Performance among the investment types in our original Plans this month was mostly positive, with commodities up +4.65%, shares up +2.43% and bonds up +0.07%. The only grey cloud was property, finishing down -2.55%.

Most Ethical Plans showed positive performance for the month, though not as strong as our Original Plans.


Summary

In December, most Wealthify investment plans produced positive returns. However, in a month where all major stock markets and commodities delivered strong positive returns, our higher risk plans have performed better than the more cautious plans, which contain more bonds.

As always, our Investment Team remain focused on keeping your investment plans on track and are ready to act as opportunities arise.

Useful links: 

https://www.ft.com/content/31eec6d0-fb39-11e9-98fd-4d6c20050229

https://www.telegraph.co.uk/business/2019/12/28/billions-pounds-piled-uk-stocks-december-biggest-wave-money/

https://www.ft.com/content/4a8ab20a-1149-11ea-a7e6-62bf4f9e548a

 

The figures shown are based on a medium-risk (Confident) investment Plan.

Please remember the value of your investments can go down as well as up, and you could get back less than invested. Past performance is not a reliable indicator of future returns. 

 

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