Research

QuotedData’s Economic Roundup – March 2022

220309 Ukraine

Economic and Political Monthly Roundup

Kindly sponsored by Allianz

A collation of recent insights on markets and economies taken from the comments made by chairs and investment managers of investment companies – have a read and make your own minds up. Please remember that nothing in this note is designed to encourage you to buy or sell any of the companies mentioned.

Roundup

Just as the coronavirus pandemic appears to be subsiding, February ended on a sombre tone as Russia began its invasion of Ukraine. Some markets have been impacted worse than others, with those depending on its exports suffering the most. Unsurprisingly, some investment trusts have also been negatively impacted, particularly those exposed to Russia, which has had a number of sanctions imposed on it – you can read more on this in our investment companies roundup. As expected, investors have rushed to traditional safe havens such as gold, while energy prices have soared even further. Government bond yields also increased on the whole in February.

February’s highlights

Global

Alliance Trust’s manager says it has been hit by market-driven sentiment but that it is excited about its portfolio’s fundamentals and holdings with strong long-term credentials.

Herald’s chair says geopolitics are an increasing concern, added to soaring energy prices and supply-chain inflation, which will lead to inevitable fiscal tightening.

Carolan Dobson, chair of Brunner, believes we are at a turning point in global stock markets with regards to inflation and interest rates. She says the ride will be bumpy, but investors should be patient.

Scottish American’s managers also note inflation concerns but say they don’t believe in shuffling the portfolio to ‘macro music’.

UK

Invesco Select UK Equity’s chair says despite the current challenging backdrop, she sees encouraging signs of countries beginning to learn with COVID-19 as a reason to remain optimistic.

The chief executive of Law Debenture says the market for its expanding range of pension governance services will continue to increase steadily over time.

Murray Income’s managers are taking comfort that the valuations of UK-listed companies remain attractive on a relative basis despite current market volatility.

The managers of abrdn UK Smaller Companies Growth note rising inflation is an issue for market levels and is likely to result in policy changes at central banks, making interest rate rises a racing certainty in the next few months.

City of London’s chair does not expect anything worse than a slowdown in economic growth is expected and thinks therefore that corporate profits and dividends should continue to increase during the trust’s current financial year.

Diverse Income’s managers think that if the returns on many mainstream stock markets disappoint in future, then the ongoing advantages of UK quoted smaller companies could lead to renewed institutional interest.

Henderson Opportunities’ managers explain why it is an exciting time to be investing in the UK. Rapid changes within the economy are creating real opportunities for those companies with the ability to grasp them.The manager of BlackRock Throgmorton highlights the difficult start to 2022 that equity markets have experienced.

Commenting on inflation concerns, Aberforth Smaller Companies’ chair says with the rhetoric from the central banks evolving, it does appear likely that the coming year will bring some form of resolution.

The managers of Aberforth Split Level Income say markets appear to be anticipating economic and financial conditions little changed from those that have pervaded since the global financial crisis: low real economic growth, low inflation, low interest rates and low bond yields.

Full version

Click on the link at the bottom of the page to access the full report.

Kindly sponsored by Allianz

The legal bit

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March 2022 Economic and Political Roundup

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