The first quarter of 2018 finished in a very different fashion to the one it started in. Recent moves have highlighted uncertainty and brought back volatility that was missing for most of last year.
While these stock market movements were arguably overdue, we believe that they will also be short-lived and that, while elevated levels of movement may be more frequent this year, they will not be here for good. Bond markets also fell over the quarter but many regained their losses by the end of March and the fears over interest rate increases in the US subsided, though these are likely to re-emerge as we move into the summer.
As the underlying economic data points remain supportive of further growth in many regions and suggest robust, resilient stability in others, we continue to hold conviction in Europe, the US and Asia and are sceptical around progress for the UK. Our bond funds have held pleasingly firm so far this year in the face of higher market movements and we have no plans to move away from a lower-risk, ‘safety-first’ strategy at present.