Tiller investor update: January 2019


If December was a tough month for stock markets, January was the complete reverse.

All stock markets rallied, with the UK domestic assets doing particularly well. For example, our UK mid-cap ETF and property ETF increased by 7.25% and 8.75% respectively. We attribute this to investors pricing in a higher probability of a delayed Brexit.

On a global level we believe markets were buoyed by the US Federal Reserve and its more accommodative tone over the past month. Previously they had been steadfast in communicating their desire to increase interest rates and consistently reduce the size of their balance sheet (the opposite policy to that of the past ten years, which was referred to as Quantitative Easing).

Following the volatility of stock markets in December, the chairman of the Federal Reserve has been taking a less firm approach, suggesting they could be more patient with interest rate increases.

Historically, this more accommodative approach has been viewed positively by markets, and yet again, both stock and bond markets rallied.

With market expectations now implying no US rate rises for 2019, the environment for emerging market equities looks brighter – even considering the mixed messages coming out on the Chinese economy. As a result, we are re-examining the level of emerging market equity exposure within Tiller portfolios, with a view to increasing the weighting.


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