Since our last update stock markets have continued their impressive recovery in value from the lows of the first quarter. This growth has particularly been in sectors that saw a surge in demand during global lockdowns, such as technology stocks. However, there have been some areas of significant losses, such as the travel and leisure industries, which have suffered greatly from the restrictions.
Our Investment Model Portfolios have mostly performed well over the previous quarter, with holdings in government bonds, which we increased earlier in the year, providing valuable protection against falls.
The future is still highly uncertain, with COVID cases in the UK still rising and further lockdown measures being introduced on a frequent basis, five vaccine trials taking place, and the US election taking place early in November.
With all of these in mind, we are assessing our defensive positioning in some portfolios and are tentatively looking at where we may be able to begin to increase exposure to the areas that might be the biggest beneficiaries of a return to normality at some point next year.
The events of this year have tested our philosophy to remain more cautiously positioned than most, and it has served us well during a tumultuous year. Now is not the time to depart from these core principles, but we may allow ourselves a slightly more optimistic outlook next year, if the conditions allow it.
You can read our full Investment Market Review & Outlook for further details. The performance sheets now include information on our range of Ethical Investment Model Portfolios, which have done particularly well this year.