clarity fund focus and market commentary Q2 2020
Published 23 July, 2020
After experiencing one of the most rapid drawdowns in history, with markets falling over 30% in less than a month, it appears we are now well into the recovery phase with many stock markets back to pre-crisis levels.
Turning to the global economy, growth remains significantly lower; this is where the disparity between growth and stock-market returns lies. With the lockdown, labour markets have come under pressure and unemployment has risen significantly - and will continue to do so, as government support packages are gradually reduced over the course of the year. The questions are: whether equity valuations are too high for current economic conditions, and what shape will the recovery be?
COVID-19 was not the only topic in the headlines over the quarter, there were also a number of political issues. China-US tensions returned, this time caused by the protests in Hong Kong after China’s recent passage of the National Security Law. This, combined with riots in the US, has created social and economic disruption. But so far, the disruption has not been enough to undermine investor confidence, especially combined with the response by central banks.
Our latest fund focus provides a high-level overview of global markets in the second quarter of 2020, along with updates on eight of our buy list funds:
- Liontrust Special Situations (high score)
- Lindsell Train UK Equity (high score)
- Fundsmith Equity (high score)
- M&G Global Floating Rate High Yield (low score)
- M&G Feeder of Property Portfolio (low score)
- Aviva UK Property Feeder (low score)
- Baillie Gifford Japanese (biggest mover up)
- Jupiter Strategic Bond (biggest mover down)
For more information
If you have any queries regarding this update, please contact your usual clarity adviser or get in touch on:
Tel: 0800 368 7511