UK and European sectors have struggled in the last month, along with property.
What’s Hot
- The bounce in US smaller companies has had many a commentator jumping on the bull market bandwagon. The reality is less exciting…
- …They were down 25% at worst from the 2021 peak, and remain down 17%. More in the next teleconference. Ditto on the main North American sector.
- UK index-linked gilts appear regularly in this feature, though mostly as duds. Avoid – unless you have some insight which we do not.
- The appearance of two emerging market sectors is much more interesting.
- Emerging market equities are cheap. They normally respond better to a cheaper dollar, but have bounced despite a firm dollar.
- It is similar for emerging market bonds, which are also, in many instances, not exposed to the high and rising interest rates and high inflation of the West.
- Try and find a space for emerging markets in your asset allocation.
What’s Not
- Two UK equity sectors, and a property sector with a UK focus, underpin how the mood in the UK has turned down in the last month.
- We can see great value in significant parts of the UK market. But, unfortunately, what is cheap can get cheaper.
- Concerns over the economy have also hurt European smaller companies. The sector was down 35% at worst from its 2021 peak, bounced into April 2023, and is now rolling over and down again – down 24% from the 2021 peak, and appearing to head lower. Avoid.
What’s Hot
|
Name
|
Last Month's Performance %
|
|
UK Index Linked Gilts
|
3.75
|
|
North American Smaller Companies
|
2.32
|
|
Global Emerging Markets
|
1.94
|
|
North America
|
1.81
|
|
Global EM Bonds Blended
|
1.76
|
What’s Not
|
Name
|
Last Month's Performance %
|
|
Property Other
|
-3.26
|
|
European Smaller Companies
|
-2.94
|
|
Europe Including UK
|
-1.92
|
|
UK All Companies
|
-1.83
|
|
UK Equity Income
|
-1.83
|
Performance 01/06/2023 – 27/06/2023
All performance figures quoted as total return in GBP