Our monthly portfolio positioning commentary.
April was volatile for markets, as equity and bond markets reacted to uncertainty caused by the US tariffs announced by President Trump on ‘Liberation Day.
March was a negative month for markets, with both equities and bonds falling. Markets were driven by continued volatility, due to the uncertainty around US tariffs, growth and inflationary concerns as well as shifting fiscal policy in Europe.
In a mixed month for investors, European and Emerging Market equities continued to outperform the US. The S&P 500 saw a decline, driven by weaker than expected revenue for Nvidia, leading to a particularly difficult month for the Magnificent 7. US equities were not alone, with Japanese equities also performing notably badly.
January saw a change to 2024’s status quo with European markets outperforming the US, albeit most equity markets broadly produced positive returns. This was despite the supportive ‘America First’ policy agenda of the Trump administration, as US equities were impacted by the emergence of the Chinese Artificial Intelligence (AI) company, DeepSeek.
Equities experienced a volatile December, with developed markets underperforming emerging markets. US equities sold off as a result of the more hawkish tone from the US Federal Reserve and the political instability in France and South Korea, impacted European and Asian equities respectively. Whilst Asian markets on the whole declined, Chinese equities outperformed its peer group as investors reacted well to the Central Government’s commitment to stabilising both the equity and property markets. Furthermore, rising bond yields in the US and European nations lead to falling bond values.
The US stock market rose sharply in November as investors considered the implications of the clean sweep Republican US election victory. Outside of US markets, the election results were met with some caution, mainly due to the threat of a fresh round of tariffs being imposed. This was most impactful on emerging markets and specifically in China, where equities declined due to concerns about a potential trade conflict with the US and negative investor sentiment towards the government’s economic support measures introduced to revive the econom
In October, financial markets were volatile despite robust economic data from the US. Equities on the whole delivered negative performance, with US equities performing the best among developed markets. Weaker-than- expected earnings from Apple, Meta, and Microsoft impacted US equity performance, while European equities under-performed due to weaker corporate earnings reports. Emerging market equities faced challenges, mainly driven by Indian, and to a lesser extent, Chinese, equities.
Fixed income assets struggled over the month, with bonds selling off as yields rose. However, gold rallied to a new high.