Goodbye May
In the UK, the big headline that grabbed the nation’s attention was the announcement that Prime Minister, Theresa May, will depart No 10 after failing to deliver a Brexit plan, not once but twice. May will step down on 7 June 2019 with new leadership of the Tory party to be confirmed later in the month. Boris Johnson the former Foreign Secretary is the bookies’ current favourite for the top spot, but there’s no shortages of applicants for the job!
The ongoing trade-tiff as we like to call it, between the US (Trump) and China, never likes to be out of the spotlight for too long. The latest drama on what feels like a soap opera to rival Corrie, is the US Commerce Department putting Huawei Technologies on its so called “Entity List” – a move that bans the company from acquiring components and technology from US firms without government approval. This has led to a number of technology companies scaling back or ceasing entirely their relationships with the Chinese tech firm.
Also in May, the entire European Union saw votes for MEPs, who are essentially local politicians representing you in Brussels where the European HQ is based. Unsurprisingly there’s a consensual view amongst European voters across all countries that they’re tired of BAU politics, with smaller parties on the left and right, winning far more votes than ever before at the expense of those parties in the middle.
Markets
May was a testing month for investors who own shares, with most major stock markets producing negative returns.
The UK’s FTSE 100, representing the largest companies traded on the UK stock market, delivered some of the better returns out of global markets, finishing down -0.81%. The better returns compared to other stock markets appear to be mostly due to weakness in the Pound versus most major currencies. As most company earnings in the FTSE 100 are generated overseas in non-GBP currencies it means when they convert their earnings into Pounds, the companies will see an increase in profits, thanks to a favourable exchange rate.
US stock markets had a more challenging month, ending -6.35% lower, largely in part due to the ongoing trade tiff between the US and China driving investors towards a more cautionary stance.
The worst performers contributing to the overall weakness of large companies in the US represented by the S&P 500 are all tech stocks, Apple (-12.42%), Amazon (-7.86%), Microsoft (-4.95%), and Facebook (-8.24%). High growth stocks like the technology sector typically perform stronger than the general market in good times but will encounter more dramatic dips when investors get jittery, and stock markets decline.
Other regions including, Europe (-2.53%), Emerging Markets (-5.33%), Asia Pacific (-4.83%), and Japan (-6.03%) also saw negative returns.
In corporate news, Amazon has become one of Deliveroo’s largest investors. This will help Deliveroo with their global expansion plans and dealt a blow to the share price of Deliveroo’s biggest rival, Just Eat, down -8.23% on the day of the announcement.
Currency
The British Pound’s performance was mostly weaker against major global currencies due to the continued Brexit saga, international trade tensions weighing on the global growth outlook, and Tory party instability. The Pound declined against the Japanese Yen (-6.17%), US Dollar (-3.19%), and (-2.77%) against the Euro.
Investment type performance breakdown
Performance among the investment types in your plan this month was mixed, with shares (-3.12%), and commodities (-1.97%) finishing lower. May’s bright spots were global property (+2.89%), and bonds (+2.25%) closing the month higher.
Summary with Plan details
Investment plans similar to investment types produced a mixed set of results, those holding more defensive investments like bonds, delivered positive returns. Whilst on the other hand investment plans holding a larger quantity of shares would’ve have seen a decline in the value of their plans.
Our investment team always remain focused on keeping your investment plan on track and will be ready to act as opportunities arise.
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.
