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Multi-Asset Blog - Choppy markets after flat calm

Friday, April 21, 2017

Will Bartleet, CIO and Portfolio Manager of Pacific Multi-Asset
Choppy markets after flat calm

After months of plain sailing in markets, a squall has buffeted markets over the last month. Global equities when measured in Sterling have fallen 4.5% from peak to trough. In the US, equity markets had gone 110 days without falling 1%; they typically fall that much every 11 days. That run inevitably came to an end in March.

The cause of the fall in markets however, is shared equally between equity and currency markets. The news of a snap election in the UK has caused Sterling to rally as investors have taken the view that a conservative majority lessens the chances of a hard Brexit. The Pound's recent rise, most notably against the dollar, has been a strong tide for a Sterling investor to navigate, pushing down the value of overseas assets.

After a period of unusually low volatility, such events are an inevitable feature of investment markets. Multi-asset investors enjoy the benefit of diversification in such events, reducing the impact of market falls. Finally, volatility provides opportunities to buy into weakness of asset classes that have been caught up in the cross currents of markets.

IMPORTANT INFORMATION | Issued and approved by Pacific Capital Partners Limited, a limited company registered in England and Wales, authorised and regulated by the Financial Conduct Authority . The information contained herein is not approved for use by the public and is only intended for recipients who would be generally classified as investment professionals. Information or opinions contained in this article do not constitute an offer to sell or a solicitation, or offer to buy, any securities or financial instruments or investment advice or any advice or recommendation in respect of such securities or other financial instruments. Where past performance is shown it refers to the past and should not be seen as an indication of future performance.


 

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