Monthly Update
31 December 2020

Monthly Update Cover

The Fund returned 2.45% during the month, only marginally behind the IA Flexible Investment sector average return of 2.58%.

December was a positive month for equities and UK fixed income markets, with most delivering positive returns. UK equities were some of the strongest performing as Brexit negotiations came to a positive conclusion. This was particularly beneficial to small and mid-cap stocks. Emerging markets were also strong performers on the back of further US dollar weakness and expectations that economic growth would outperform developed markets into 2021. Within UK fixed income markets investment grade bonds were the strongest performers, benefitting from falls in government bond yields and credit spreads narrowing.

The Fund remains underweight its neutral allocation to equities although during the period the underweight position was reduced. The allocation to Asian equities was increased. A new emerging market fund which has a value style bias was also added. The Fund maintains an overweight position to fixed income. Whilst yields are low in absolute terms there still remains scope for spread compression in credit. Within this allocation our preference is titled towards strategic bond funds whose managers tactically allocate across the many fixed income sub-asset classes whilst also deploying active duration management. With fiscal and monetary stimulus still at large the Fund maintains its holdings in gold and silver to protect against the possibility of currency depreciation, inflation and policy error.

This article is for information purposes only and should not be construed as advice. We strongly suggest you seek independent financial advice prior to taking any course of action.

The value of this investment can fall as well as rise and investors may get back less than they originally invested. Past performance is not necessarily a guide to future performance.

The Fund is suitable for investors who are seeking to achieve long term capital growth.

The tax treatment of investments depends on the individual circumstances of each client and may be subject to change in the future. The above is in relation to a UK domiciled investor only and would be different for those domiciled outside the UK. We strongly suggest you seek independent tax advice prior to taking any course of action.

Past performance is not a guide to future performance.

Sign up today!

To receive notifications on new market insights published to our blog, please complete the below form.

You can unsubscribe at any time by emailing enquiry@lowes.co.uk or by clicking the ‘unsubscribe’ link at the bottom of each email.

Full details of how we use and secure your personal information and how to update your marketing preferences can be viewed in our Privacy Policy