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Bulletin - Market & Fund Performance

| Investment | By Caroline Shaw

Last week the FTSE 100 index rocketed up 5.2%. This week, up to the close on Thursday night, it’s slumped 6.3% over fears of a second wave of Covid-19 cases and a worse economic contraction than imagined. The Vix index, measuring stock market volatility, has spiked again.

Today it was announced that the UK economy shrunk over 20% in April. It may be the largest monthly contraction on record but it’s hardly surprising. The lockdown was in force throughout the whole month of April and most people spent money on nothing more than essentials.

There should be an improvement in May data and again for the current month, as most shops are given the go-ahead to open. Of course, millions are furloughed and many more on reduced income, so a return to spending at previous levels isn’t immediately obvious. A technical recession, two quarters of negative GDP growth, is imminent.

In light of the economic uncertainty, we continue to carefully analyse the companies we invest in. Businesses have battened down the hatches cancelling dividends, increasing cash levels, freezing Board and executive level salaries and delaying bonuses. These measures are important to ensure survival and readiness to react when the pandemic eases. We’ve found good opportunities to top up existing holdings and to initiate new positions. In some of our investments, we’ve used the recent market rally to take profits.

Over this up-and-down two-week period the FTSE 100 index is actually flat, with a total return of just 0.1%. The US market has been down over the same two weeks, falling 1.3%. Your Courtiers funds have fared well and been defensive with each of Total Return Cautious Risk, Total Return Balanced Risk and Total Return Growth slightly outperforming the FTSE 100.

During May, each of the three Courtiers funds out-performed its peer group. Our long-term risk adjusted returns are also excellent. All of our multi-asset funds have above-average peer group risk adjusted returns over 1, 3, 5 and 10 years.

As I write, the European markets are rallying once more. The market volatility is making for a bumpy journey, but it’s creating attractive long-term investment opportunities which we hope will make for continued strong risk-adjusted returns.

Caroline Shaw CFA, MEng (Hons), Dip PFS, IMC, Chartered MCSI

Head of Fund & Asset Management

Issued by Courtiers Asset Management Limited, CAM0620413. Courtiers Asset Management Limited is Authorised and Regulated by the Financial Conduct Authority - Register No: 616322.

Warning – the views expressed by Courtiers in this summary and any video and video transcripts, are reached from our own research. Courtiers cannot accept responsibility for any decisions taken as a result of reading this document, watching the featured video or reading the video transcript and investors are recommended to take independent professional advice before effecting transactions. The price of stocks, shares and funds, and the income from them, may fall as well as rise. Past performance is not necessarily a guide to future returns.

We do not endorse nor accept responsibility for the content of any website not operated by Courtiers which you may visit by following a link from this article.

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