Trading Updates 10/12/2019
Trading Update - 10 December 2019
At the end of last week, equity risk was marginally increased across the ranges in light of increased confidence that the global economic slowdown is abating.
Significant monetary policy easing allied with some modest fiscal policy easing in 2020 should shore up economic activity in the short term, US/China trade frictions notwithstanding.
This involved adding to the positions in the iShares MSCI EMU GBP-hedged ETF. Europe would be a clear beneficiary of Chinese manufacturing activity stabilisation and on the balance of probabilities we believe that Sterling could continue to strengthen in the short term as clarity over the political outlook in the UK improves.
Furthermore, the Vanguard FTSE 250 ETF was purchased in all risk profiles excluding the Defensive fund. This purchase is the simplest way of adding broad equity risk to the region, given that we are comfortable with the current positioning in our UK equity portfolio and are not adding a new stock at this point in time. We deliberately chose the FTSE 250 over the FTSE 100 as stocks within the FTSE 250 index have, in aggregate, less international exposure than the FTSE 100 Index and therefore should be a relative beneficiary should Sterling rise following the election.
The purchases were financed largely from a reductions in cash and fixed income holdings.
Cornelian Investment Team