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Governments are trying to find a balance between not letting the second wave get out of control and keeping their economies open. It’s a delicate balance. We continue to watch events closely and importantly remain able to manage portfolios both working from an office that has stringent Covid protection measures in place and remotely at home.

The US equity market, S&P 500, ended August hitting fresh all-time highs – such has been the recovery in the stock market from the lows in March. However, as mentioned earlier September was a different month compared to those we have seen since mid-March and that trend extended to the S&P 500 market falling more, compared to other markets,  with Technology stocks the key fallers – having performed so strongly in 2020.

With equities heading backward, safe-haven assets performed stronger and UK government bonds delivered a positive return during September. The UK 10-year government bond yield fell from 0.3% to 0.23% – as bond yield falls the prices increase in value. Looking forward government bond yields look set to remain low with central banks embarking on Quantitative Easing strategies, with interest rates look routed to zero and could potentially into negative territory should their respective economies need further support.

Alex Brandreth
Chief Investment Officer

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