Investment Commentary

Global markets were extremely volatile this quarter as concerns over China’s slowing economy became more pronounced. The impact was particularly strong on emerging and Asian

Q2 saw global equities fall by over 5% in sterling terms. Concerns surrounding Greece’s debt repayments and the future of the Eurozone weighed on world markets, particularly towards the end of the quarter.

It has been a very good quarter for investors, despite the downside risks. Global equities were given a huge boost in January as the ECB announced its significant quantitative easing (QE) program which began in March. This helped the FTSE World Index gain over 5% in Q1.

World markets experienced a very volatile quarter which included a sharp sell-off in equities at the beginning of October. However, sentiment quickly returned, reflected by a gain of 4.13% for the FTSE World Index in Q4.

Given that the third quarter of the year was a period plagued with geopolitical tension, the FTSE World index delivered a surprising gain of 2.7%.

Following a volatile first quarter of 2014, Q2 has offered a much more positive outlook, with the FTSE100 gaining 2.36% as opposed to contracting by 1.26% in the period January to March.

Following strong market returns in 2013, there was widespread optimism regarding market sentiment for 2014.

The fourth quarter rounded 2013 off on a high, with many global equity markets posting impressive double-digit gains for the full year.

Looking ahead to the final quarter of the year, we expect to see continued progress in the markets, building on the consolidation of the last three months. As investor confidence returns, we should see demand increase for high quality UK stocks and selected funds, particularly those paying above average dividends by strong profitable companies.

The third quarter began with a strong start to July followed by a period of relative calm in which the FTSE-100 index of leading UK companies hovered around the 6,500 point mark. So, are we finally starting to see some welcome stability return to the markets?