Investment Newsletter July 2016
It’s a mad world... Mike Deverell Investment Manager
A lot has happened in the last month or so since the EU referendum! In that time we have seen terrorist attacks and attempted coups, a change of prime minister and an entirely new cabinet. In the investment world, we have seen the FTSE 100 drop substantially from 6,338 at close on 23 June to as low as 5,788 intraday on 24 June – a fall of 8.7%. We have subsequently seen it bounce back markedly to 6,705 at close on 18 July. That makes the index 5.8% higher than before the referendum and 15.8% above the low after the result. The FTSE 100 has benefited from the fall in Sterling, with much of the revenues of the top 100 companies being generated overseas. Meanwhile, the more
domestic focused FTSE 250 remained down 2.5% at close on 19 July compared to where it was before the vote. We have also seen property funds close their doors to redemptions and apply big mark downs on the value of their buildings. Gilt yields have hit a new record low and the Bank of England has hinted that they will drop interest rates at their next Monetary Policy Committee meeting. It has therefore been a busy time in June and July adjusting your portfolios to the new post-referendum world. Below are some of the changes we have made to a typical portfolio just in the last two months: • Reduced exposure to UK domestic stocks prior to the referendum
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