Courtiers Wealth Management
Courtiers Wealth Management

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January 2022 – Market Commentary

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Global equity markets ended the year in positive territory as investors’ initial panic caused by the new Omicron variant of Covid-19 quickly subsided. The FTSE 100 index, which measures the performance of the largest companies in the UK, enjoyed its best month of the year, rising 4.75% and reaching its highest level since before the pandemic began. Meanwhile the S&P 500 index which measures US equities achieved a fresh all-time high.

A positive year overall

The month rounded off what has been a positive year for equity markets overall, with the MSCI World index rising more than 24% in local currency terms. The glaring outlier has been China, which has seen its stock market decline -21.7% throughout the year according to the MSCI China (CNY) index, largely due to the ongoing turmoil caused by strict regulations imposed by the government.

In the UK, amid fears of soaring inflation, the Bank of England’s Monetary Policy Committee voted 8-1 to increase the UK’s base interest rate from 0.1% to 0.25%. The move was slightly surprising given the uncertainty surrounding the impact of the Omicron variant on the economy, but even after the modest hike the rate still remains comfortably below its pre-pandemic level of 0.75%.

Full round-up of December’s performance

Here is the full round-up of December market performance. In the UK, the FTSE 100 index gained 4.75%, while medium and smaller companies, measured by the FTSE 250 ex IT index and the FTSE Small Cap ex IT index, gathered 4.95% and 5.83% respectively. In the US, the S&P 500 USD index rose 4.48% while in Europe the Eurostoxx 50 EUR index climbed 5.81%. Japanese stocks measured by the Topix JPY index increased 3.45%.

Emerging markets also had a positive month overall, with the MSCI Emerging Markets index rising 1.53% in local currencies. Latin American equities, measured by the MSCI Latin America local currency index, put on 3.88% and Indian stocks rose 2.18% according to the Nifty 50 INR index. However Chinese equities measured by the MSCI China local index declined 3.19%.

In the fixed income market, UK government bonds, measured by the FTSE Gilts All Stocks index, were down 2.65%, while long dated (over 15 years to maturity) gilts sank 4.96%. Sterling denominated corporate bonds, measured by the Markit iBoxx Sterling Corporates index, lost 1.12%. In the high yield market, the Bank of America Merrill Lynch Sterling High Yield index climbed 0.66%.

There were positive returns in the commodities market. The S&P GSCI USD index, which consists of a basket of commodities including oil, metals and agricultural items, picked up 7.59%. This was led by the rise in oil price, as crude oil futures surged 13.64% during the month. In the agricultural markets, corn and wheat futures returned 4.63% and -0.39% in USD respectively, while in the precious metals markets, the S&P GSCI Gold and Silver indices gained 2.94% and 2.36% in USD respectively.

In the currency markets, it was a strong month for the pound as it appreciated 1.75% against the US dollar, 1.38% versus the euro and 3.48% against the yen.

Important information

Issued by Courtiers Asset Management Limited, CAM0421659 Courtiers Asset Management Limited is Authorised and Regulated by the Financial Conduct Authority – Register No: 616322. Address: 18 Hart Street, Henley on Thames, Oxfordshire RG9 2AU. Tel: 01491 578368

Past performance is not a reliable indicator of future returns. The value of investments, and the income from them, can go down as well as up and is not guaranteed and you may not get back the amount originally invested. Any forecast, projection or target where provided is indicate only and is not guaranteed in any way. Certain types of funds might carry a greater investment risk than other investment funds. Further details of the risks are associated with investing in Courtiers funds can be found in the Key Investor Information Document or Prospectus, copies of which are available on request or at www.courtiers.co.uk.

Disclaimer

This communication is for information purposes only and should not be relied upon in making an investment decision. The views expressed by individuals and the business are based on market conditions at the date of issue and are subject to change without notice. The mention of any stocks or shares should not be taken as recommendation to deal and does not take into account the individual investor’s investment objective or risk profile. Where an investment or security is denominated in a different currency to the investor’s currency of reference, changes in rates of exchange may have an adverse effect on the value, price or income of or from that investment to the investor. Any third party sites, or pages which are linked to the document, have not been reviewed by us and therefore we accept no responsibility for the authors or content of external link or pages. If you are interested in any of Courtiers Asset Management Limited’s range of funds, or require any financial advice, please speak to a financial adviser.

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