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February Market Update: Coronavirus bugs the markets

By Marc

Coronavirus (now referred to as Covid-19) has caused global equity markets to fall dramatically during February.  While these falls have seen dramatic headlines such as “trillions wiped off global stocks”, it is worth noting that many of the leading global stock markets remain higher than they were 12 months ago.  FTSE 100 is an exception, being slightly lower by 2.2%.

Despite this longer term positivity, it is likely that you will be feeling unsettled about your investment and these short-term falls.  It is just worth reminding yourself that you are likely to be invested in well diversified investments in line with your attitude to risk having taken into account your capacity for loss.

The following table highlights the impact on some of the leading global equity markets.

Monthly performance to end of February 2020 From end of 2018 to end of February 2020
FTSE 100 (UK) -9.70% -2.20%
Dow 30 (US) -10.10% 8.90%
Euro Stoxx 50 (Europe) -8.60% 10.90%
Nikkei 225 (Japan) -8.90% 5.60%

In terms of currency, £ Sterling ended February at 1.28 US Dollars.  This was 2.9% lower than the figure at the end of January.

Against the Euro, £ Sterling ended February at 1.16 Euros, which was 2.3% lower than the January closing figure.

Inflation, as measured by the Consumer Prices Index including owner occupiers’ housing costs (CPIH), was 1.8% in January 2020 (this is January’s data which is reported in February).  This was 0.4% higher than the previous month.  The 12-month rate for the Consumer Prices Index (CPI) rate which excludes owner occupied housing costs and council tax was 1.8% in January, up from 1.3% in December.

The Bank of England maintained interest rates at 0.75% in February.  The last change was an increase in August 2018.  This means long-suffering deposit savers are likely to continue to lose money in real terms when you consider the rate of savings interest compared to the rate of inflation.

The Omnis Managed funds, Openwork Graphene Model Portfolios and Omnis Managed Portfolio Service provide you with a diversified asset allocation in line with your Attitude to Risk, investing in Developed Market Equities, such as UK, US, Europe and Asia Pacific as well as Emerging Market equities.  Cautious and Balanced investors will also have significant holdings in UK and Global Bonds, as well as Alternative Strategies.

We believe this multi-asset approach aims to give you the best opportunity for the highest level of return for your stated level of risk.

Past performance is not a guide to future performance.  The value of an investment and any income from it can fall as well as rise as a result of market and currency fluctuations.  You may not get back the amount you originally invested.