In summary:
- The first six weeks were characterised by broad based market gains, and the second half by sharp decline in markets led by the US.
- The Investment Management Service portfolios had an underweight allocation to US equities, which has helped performance.
- Bond markets were affected by deteriorating public finances, slowing growth outlook and sticky inflation.
- Fiscal and monetary policy will ultimately be reflationary and supportive of growth in the long term, but in the short term there will be a downshift in US earnings growth.
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The value of securities and the income from them can fall as well as rise. Past performance should not be seen as an indicator of future returns. All views expressed are those of the author and should not be considered a recommendation or solicitation to buy or sell any products or securities.
