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LCP Investment Summary - June 2020
Posted on 1 July, 2020 by Administrator
Global equity markets rose 1.9% (in € terms) in June, in what was a mixed month for investors. Markets started the month very strongly following the announcement of a German €130bn domestic stimulus package, an increase by the ECB in its emergency stimulus measures and finally, the release of an unexpectedly positive May jobs report in the U.S.
However, the mood changed mid-month with U.S. equities having their worst day in three months after a downbeat outlook from the U.S. Federal Reserve, as well as growing fears of a possible COVID-19 ‘second wave’ as restrictions eased globally. The second half of the month remained mixed with some investors becoming more wary, especially following the very sharp rise in global equites since the March lows, as the number of new virus cases increased, particularly in the U.S., Brazil and India. The WHO Director-General also stated in late June ‘that the worst is yet to come’.
Longer-dated Eurozone bond prices rose 0.6% in June, with the yield on the AAA Eurozone 15+ Year Index falling to -0.12% by month-end. The Euro Broad Sovereign 10+ Year Index rose by 1.8% with its yield falling to 0.62%. It was also a mixed month for the bond markets with German bund yields initially hitting a five-month high as the ECB pledged further support for the eurozone area and with the positive U.S. jobs report in early June.
Yields then fell for the remainder of the month as rising COVID-19 cases globally made some investors reassess the strength and timing of a recovery in the global economy.
Sample DC Schemes
Our three sample DC Strategies all rose in June with most assets classes up.