In the run up to the General Election, it was announced that in the last quarter, the UK economy continued to grow, albeit slightly slower than expected, at 0.3% rather than 0.4%. However, investors should not be overly alarmed at the prospect of a slowdown impacting UK financial markets. As a whole, UK companies generate a large proportion of their earnings overseas, and the Bank of England has said it will step in to support the economy if necessary, and could cut interest rates to help encourage spending and borrowing.
In other markets, Germany, the largest of the Eurozone countries, defied consensus and delivered economic growth, rising +0.1% against an expected -0.1% decline. The German finance minister recently stated they were ‘cautiously optimistic’, predicting a slow rebound in growth next year.
In the United States, the economy continues to exceed expectations, up 2.1% from the previous quarter, compared to forecasts of 1.9%. The data pleasantly points to business investments performing better than anticipated, despite the ongoing US-China trade war.
Market Performance
November was a largely positive month for global stock markets.
The FTSE 100, representing the UK’s largest public companies, delivered returns of +1.82%. Broad-based gains across multiple industries indicate that the move was largely sentiment driven, as the prospects of a hard Brexit declined further.
The US stock market also performed well, closing +3.67%, with technology and financial services companies leading this growth. ‘Earnings season’, where companies report to investors how they’ve performed for the previous quarter, has been a positive one with 75% of the S&P 500 companies delivering earnings above expectations.
Most other regions also performed well; Asia Pacific (excluding Japan) gained +0.46%, Europe +2.81%, and Japan +1.60%.
The one major region that performed poorly last month was Emerging Markets. Shares in this particular region lost -0.13% in value for investors. Political unrest in Hong Kong, together with poor performances in the Brazil and South Korea markets, took their toll on Emerging Markets.
In corporate news, Walt Disney shares soared in November, up +16.67% after announcing a staggering 10 million sign ups in just one day to its new streaming service, Disney Plus.
Currency Performance
In November, the British Pound continued to strengthen against most currencies; against the Euro it was up +1.07% and +1.20% against the Japanese Yen, however it declined slightly against the US Dollar, at -0.13%.
Investment Type Performance
Performance among the investment types in your Plan this month was mostly negative, with bonds down -0.18%, global property -0.96%, and commodities -1.63%. However, shares were up +2.57%, helping to offset these losses.
Wealthify Plan Performance
Despite most investment types struggling to deliver positive returns, we had a positive November across all our investment plans. Plans with more shares performed better than those with a higher portion invested in bonds, reflecting an optimistic view from investors. Historically, bonds have tended to perform better in times of uncertainty and concern, and share prices rise when there is optimism on the future of companies’ sales and earnings, and the economy.
As always, our investment team remain focused on keeping your investment Plan on track and are 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.
