Inflation data in the USA was again lower than expected. This resulted in expectations of a reduced pace of monetary tightening from the central banks. With liquidity still abundant, equity markets generally rose. The FTSE All World High Dividend Index rose 8.6% while the Global Equity Income Portfolio gained 6.7%. The large cash allocation taken by the portfolio acted as a headwind to performance. Cash levels were decreased mid-month with the purchase of an S&P Global Dividend Aristocrats ETF.

During the month the best performances held within the portfolio were CK Hutchison +16.9%, Hannover Re +14.8% and the Asian Pacific Dividend ETF +14.0%. Improved sentiment towards the UK and China buoyed CK Hutchison, indications continue to be that the underwriting environment remains favourable for Hannover.

The portfolio’s holdings worst performers held were those in Roche -2.8%, the newly acquired S&P Global Dividend Aristocrats position +0.5% and in BAT +2.2%.

With monetary policy and global liquidity continuing to tighten, albeit at a slowing pace, it would be imprudent to think of the general rise of equity markets as anything other than a bear market rally. While from a top-down perspective earnings estimates are generally declining, pleasingly many of those stocks identified by the active global equity team continue to buck this trend. Some of the opportunities currently presenting themselves at a stock level are in slightly smaller companies than the strategy has typically invested in historically and these may be added in due course.