Global equities had a strong January with the FTSE All World index increasing 7.1% during the month. Led by the continued expectations for economic recovery in China Emerging market equities performed particularly strongly. After the end of the zero Covid tolerance policy the Chinese population has larger than historical savings. An economic rebound in the nation should be favourable for regional trade. Inflation expectations moderated during the month providing investors with hope that monetary policy may become less restrictive than previously thought. The prices of several classic growth stocks that had seen large reductions during 2022 rebounded significantly.

The Global Leaders Portfolio returned 5.6% during the month with good performances from Chinese exposed names and technology holdings. The best performers were Alibaba (+25.1%), Kering (+23.1%) and Amazon (+22.8%). After proving resilient in 2022 the healthcare sector was less positive. Johnson & Johnson (-7.5%), provided a slightly disappointing, but not unexpected update on their controversial defence for historic talc contamination. AstraZeneca (-3.4%) and Novartis (-0.6%) also saw falls in their share prices.

No new positions were added or sold in the month.

Despite redundancy announcements by technology companies in the US, unemployment remains low, and inflation remains elevated. On the first of February the Federal Reserve raised interest rates and their report continued to indicate an intended reduction in liquidity. January might therefore be more of a classic mid-bear market rally than optimists would like to hope. As a reminder, equities are long term investments and with shares generally now trading on lower multiples, expected returns over the long term are improved from this time last year.