Volatility has returned to global stock markets. Since the 24th February (the date of the largest fall for the FTSE 100 index for three years) to the close of business yesterday (5th March) we have seen global markets plummet. The FTSE 100 and S&P500, measuring UK and US equities, have dropped 9%. European equities have fared worse, particularly in Italy where the stock market has fallen almost 13% in less than 2 weeks.
During this period, our options strategy has helped us defend against the worst of the negative returns. The Courtiers Total Return Cautious Risk fund has fallen just 4.5% and the Courtiers Total Return Balanced Risk fund just 6.5%. The Courtiers Total Return Growth fund, which started the period fully invested in equities, has fallen just over 8%. All have been more defensive than global markets.
This week, markets rallied slightly and we have lagged this a little due to our defensive stance. However, as I write, the FTSE 100 has fallen more than 3% on news of the first death within the UK and on growing fears of an economic slump. The UK market, and other global stock markets are set to finish another week in negative territory. We are well positioned for this and should continue to defend our clients against the worst of the falls.
It is likely that we will take the opportunity today to begin to add exposure in Courtiers Growth fund. Our clients invested in this fund expect to be taking some market risk and we are currently at historic low levels of exposure. However, overall, we will retain a cautious stance whilst the market volatility remains high and governments continue to grapple with this unfolding health emergency.
Caroline Shaw CFA, MEng (Hons), Dip PFS, IMC, Chartered MCSI
Head of Fund & Asset Management
Issued by Courtiers Asset Management Limited, CAM0320354. Courtiers Asset Management Limited is Authorised and Regulated by the Financial Conduct Authority - Register No: 616322.
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