The second quarter of 2019 contained a huge amount of political noise, with Brexit weighing on everyone’s minds, the US:China Trade War continuing to rumble on, and India welcoming the re-election of their Prime Minister with an improved majority.
All of these issues affected asset prices across the board at various points over the quarter but the conclusion was a continuation of the healthy returns we had enjoyed in the first three months of 2019.
In the UK, we still don’t have a clear picture of the route forward but a ‘no deal’ Brexit is still amongst the possible options, according to the two candidates to become Prime Minister and a fresh general election and a second EU membership referendum remain distinct possibilities for the second half of the year.
While trade wars, Brexit and interest rates have dominated the news recently, we continue to rely on economic data as our main gauge of each market. Data in the UK and Europe has deteriorated recently, but the US and Asia have been more resilient, which is why our portfolios have a much greater weighting towards those areas.
Overall, we have enjoyed a fruitful period in portfolios so far this year, though we have been decreasing risk. We remain defensively positioned, as signs of market weakness are creeping in. That said, with lower interest rates in the US and potential further stimulus from Europe and Asia, we could see growth continue well into next year.
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