TAMAC Global Managers January Comment

Global equity markets enjoyed a strong start to 2020 before concerns over the impact of the Coronavirus outbreak hurt investor sentiment at the end of the month. The MSCI All Countries Index fell by 0.58% in GBP for January while global bond markets (Bloomberg Barclays Multiverse Index) gained 1.66% in GBP. We are pleased with the fund’s strong performance given the volatile macro backdrop across the month.

Global events took precedence over fundamentals, with US-Iran tensions and later concerns over the Wuhan flu taking centre stage. China has acted to contain the virus, and although in the near term growth will likely be impacted policy makers have taken a series of measures to provide stimulus to the economy.

Macroeconomic data from the US shows the economy is growing at a steady rate of 2.3% YoY, with weaker manufacturing data being offset by stronger services data. At the halfway point of US earnings season the majority of S&P500 companies are reporting better than expected earnings and revenue growth.

At the beginning of the month we took the opportunity presented by the global equity market run-up to lighten equity exposure by approx. 6%, in particular reducing emerging market exposure to give the fund a more balanced allocation.