18 July 2023 View all posts

Global Equity Income Portfolio: June 2023

Stock markets responded positively to the political agreement research to raise the US debt ceiling. The FTSE All World high dividend index gained 5.0%. There was some broadening of the market rally and it was not just those stocks exposed to the current in vogue theme of artificial intelligence that performed well. Factor analysis indicates that lower quality and more volatile stocks were amongst the best performing area of the market.

The Global Equity Income model portfolio (USD) gained 2.9% during the month. The best performing holders included Shell (+7.9%) following an announcement by OPEC to reduce production which raised oil prices. Admiral shares were the worst performing holding with sell side estimates for future earnings falling as analysts speculated that the increase in inflation would result in higher levels of claims and hence reduce future earnings. The position is under review.

There were few other negative returns from fund holdings and trading was limited.

Central banks are once again in liquidity reduction mode in order to be shown to be taking action to contain inflation.