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Fund Performance Over Covid-19
Monday Musings 22/03/2021
It is almost a year to the day (23 March 2020) since the FTSE 100 bottomed at 4,994 amid widespread fear over what the pandemic could do to global growth and corporate profits (amongst other things). Dividend cuts were picking up speed, oil prices were on their way into negative territory (if only briefly) and perceived ‘haven’ assets such as the dollar, gold and bonds were performing strongly. Pessimism prevailed.
Lo and behold, 12 months later and the picture is very different. Our clients shrewd enough to have stored up some cash and brave enough to have started to take on more risk a year ago would have done remarkably well. The question then is “will the trend continue” in truth Equities have taken a bit of a hit this week as Government Bonds spiked. Even the Nasdaq took a hit. Despite this, investors have been piling into equity funds. Global Equity funds have attracted $347 billion this year matching the whole of 2017 according to the Bank of America.
Although President Biden has got his Covid relief bill through in the USA and has the unions on his side by bailing out their pension plans, he is keeping his fingers crossed that the money he is giving directly to families will begin to kick start the economy. Over here Boris seems to be holding his nerve over the lockdown which should at least allow companies of all types to plan their way forward. Although we have to start paying for the support that has kept many of our fellow citizens in a job, it seems hard to fault the huge sums that have been spent looking after our neighbours.
My decision to pull out of Property funds back in 2018 looks even more like a good call with the recent rumours of John Lewis closing even more stores, including the one in West Quay. You must ask yourself if John Lewis goes how will the whole centre be impacted as there is no question John Lewis is the key attraction.
It is nearly too late to make your ISA investment for the current tax year with most investment houses having a deadline this year of 1st April. If you want to discuss making use of your allowance, £20K please get in touch. 02380243665, firstname.lastname@example.org
So, to the markets