Trading Updates 21/01/2020
Trading Update - 21 January 2020
Vanguard FTSE 250 ETF sold, Vanguard FTSE Emerging Markets ETF purchased
Shortly before the UK general election we increased our exposure to UK equities by purchasing the Vanguard FTSE 250 ETF. Given the outcome of the election and the subsequent Sterling strength, the trade has done well. We have now decided to switch the holding in to the Vanguard FTSE Emerging Market ETF.
Following the initial relief rally in UK stocks and the currency, we now anticipate a more difficult period of negotiation with Europe which could result in Sterling weakness. If correct, this would impact sentiment towards the more domestically focussed FTSE 250 constituents.
The prospects for Emerging Markets are improving relative to Developed Markets as activity accelerates following the Chinese/US trade truce and fiscal and monetary stimuli outside the US. With improved global activity, the likelihood of further US Dollar strength diminishes further supporting Emerging Market fundamentals.
Cornelian Investment Team