Head of Fund & Asset Management Caroline Shaw (or Caz as she’s known in the office), gives us an overview of recent market activity and fund performance.
Summary
Volatility has not gone away. While still well above its average, it has come down a lot.
Volatility happens whether markets are going up or down and lately they’ve gone up a lot – they’ve rallied.
It’s a different picture across different parts of world. The virus is affecting different countries at different times and this reflects in their economies and stock markets. We are well diversified globally and there’s been a good pickup from Courtiers funds.
Since market lows on 23rd March:
Courtiers Total Return Growth fund up 26%
Courtiers Total Return Cautious Risk fund up 14%
Courtiers Total Return Balanced Risk up 21%
It’s been a difficult period for bonds. Bond market prices have rallied enormously as yields have fallen around the world, an effect of central banks trying to prop up economies and cut interest rates. You could give your money to the UK government for 30 years and they’ll only pay you 0.55%. Unheard of in my lifetime.
While diversification is key, we haven’t benefited from the current corporate and government bond market rallies because we don’t think the interest rate risk is worth it. Rates will rise in the future causing prices to tank. From a long-term view, that’s a real risk and a concern that we’re managing.
Above-average risk adjusted returns
It’s been strong for Courtiers funds over the longer term. All data to end of April shows we are still above average over 3, 5 and 10 years for our risk adjusted returns. We’re really happy with how we’ve picked up on this recent rally and the long term returns for the Courtiers funds.
