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Focusing on sectors that will prosper

John Rosier explains the thinking behind his new Funds portfolio and the sectors he is most drawn to
July 16, 2020

Equity markets continued to recover in June. The FTSE All-World (GBP) Total Return Index was up 3.3 per cent. That left it up 0.7 per cent in the first half of 2020. Pretty impressive given the extraordinary events of the past six months. The easing of lockdown restrictions contributed to a general feeling that we were through the worst of Covid-19. That, and a realisation that cheap money was here to stay. US technology stocks continued to lead the way, with the Nasdaq 100 up 6.3 per cent. At 10 July, the Nasdaq 100 is up a remarkable 24 per cent in 2020.

Continental European markets did well, with the DAX up 6.3 per cent, the Italian MIB up 7.3 per cent and the French CAC up 5.1 per cent. In the Far East, China gained 6.8 per cent and Hong Kong 6.4 per cent, but the Nikkei 225 was up only 1.9 per cent. Commodities were also robust. In a clear indication that markets were more optimistic about the economic outlook, copper gained 12.5 per cent, and oil was up 10.5 per cent, with Brent crude above $40 a barrel.

UK equities continued to lag. The FTSE All-Share (TR) Index was up only 1.5 per cent, leaving the index down 17.5 per cent in the first half (H1). The FTSE 250 has fared even worse, down 21.8 per cent. That compares with a fall of just 4.0 per cent for the S&P 500, a 7.1 per cent drop for the DAX and a 12.3 per cent fall for the MIB.

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