What’s Hot
- The theme among our big hitters this month is fairly simple, Europe up (UK included).
- Cheap European small-caps attracted buyers, ignoring recessionary concerns.
- UK Equity Income notably outperformed the broader UK market, as that sector tends to have a Value-style bias. This includes sectors that tend to outperform during high inflation, like energy, commodities, and consumer staples.
What’s Not
- The China sector struggled this month. After a 35%+ run from late October to late January, thanks to China’s unlocking, though just in the last week it may have bottomed.
- This “breather” stretched across to other China influenced sectors in Asia and Emerging Markets.
- More concerning is that “Linkers” or UK Index Linked Gilts feature yet again…
- as we have said many times, what often appears “safe” is sometimes nothing of the sort, and particularly so at the end of a 40-year cycle of falling inflation. This is made very obvious by the chart below, depicting the FTSE 100 and S&P 500 vs Vanguard’s UK Inflation Linked Gilt fund during its meltdown last year.
What’s Hot
|
Name
|
Last Month’s Performance %
|
|
European Smaller Companies
|
2.42
|
|
Europe Excluding UK
|
2.13
|
|
UK Equity Income
|
1.93
|
|
UK All Companies
|
1.63
|
|
Europe Including UK
|
1.24
|
What’s Not
|
Name
|
Last Month’s Performance
|
|
China/Greater China
|
-7.38
|
|
UK Index Linked Gilts
|
-5.82
|
|
Asia Pacific Excluding Japan
|
-4.69
|
|
Global Emerging Markets
|
-4.11
|
|
Asia Pacific Including Japan
|
-3.61
|
Performance 01/02/2023 – 28/02/2023
All performance figures quoted as total return in GBP