Market Outlook & Managed Portfolios Review – December Quarter, 2019

Market Outlook

With a full month of 2020 now elapsed, what started in share markets as a very strong performance for the year has recently retraced on the back of concerns for global growth associated with the coronavirus threat emerging from China. Markets don’t like uncertainty hence the recent weakness in markets, as the virus threat is extrapolated as potentially being a broader threat to economic growth particularly in China.

It’s clearly too soon to establish what the impact may be, and our investment committee is monitoring closely, and expects further volatility in markets in the coming weeks until markets arrive to a sense of perspective on the actual threat.

This said, underlying economic conditions globally remain moderate with the cheap interest rate story (that’s been in play for 12 months) providing support for valuations once the situation becomes clearer.

Portfolio Performance

On 2019 portfolio performance please also find attached information sheets on the Pride / AZ Sestante portfolios which recorded a strong calendar year performance on the back of the themes of easing economic concerns and a continued supply (deluge) of cheap money (aka low interest rates).

In summary, performance in the portfolios over the 12 months (noting this is a guide, and every client’s model portfolio performance varies based on a range of factors) ranged from 14.4% for the Moderately Conservative portfolio through 21.89% in the Assertive portfolio.

AZ Sestante
Assertive Managed Portfolio

The December quarter capped a year of positive returns for investors, offsetting what had been a flat 2018. Despite short lived bouts of uncertainty during the final quarter of the year, solid returns resulted from the now-familiar theme of low interest rates globally which were assisted by rearguard US Fed action which provided further liquidity to investment markets. During the quarter, gradual steps were taken towards a resolution of the trade fracas between the US and China, and uncertainty was removed with a resounding victory to the Conservative party in the UK, finally providing political momentum to the Brexit impasse.

Pride Advice – AZ Sestante
Balanced Managed Portfolio

The December quarter capped a year of positive returns for investors, offsetting what had been a flat 2018. Despite short lived bouts of uncertainty during the final quarter of the year, solid returns resulted from the now-familiar theme of low interest rates globally which were assisted by rearguard US Fed action which provided further liquidity to investment markets. During the quarter, gradual steps were taken towards a resolution of the trade fracas between the US and China, and uncertainty was removed with a resounding victory to the Conservative party in the UK, finally providing political momentum to the Brexit impasse.

Pride Advice – AZ Sestante
Moderately Conservative
Managed Portfolio

The December quarter capped a year of positive returns for investors, offsetting what had been a flat 2018. Despite short lived bouts of uncertainty during the final quarter of the year, solid returns resulted from the now-familiar theme of low interest rates globally which were assisted by rearguard US Fed action which provided further liquidity to investment markets. During the quarter, gradual steps were taken towards a resolution of the trade fracas between the US and China, and uncertainty was removed with a resounding victory to the Conservative party in the UK, finally providing political momentum to the Brexit impasse.