Apr-24: Insights

Read the latest Avastra Fund insights on Markets, Equities, Bonds and Alternatives for April 2024.

April 2024 Update

​For UK professional investors only 

MARKETS

​World equity markets - led by the US - declined as markets priced in a changing interest rate outlook following a strong rally. UK equities bucked the trend.

Inflation continues to moderate but is proving stickier in the US, creating a slight divergence. Reacceleration risk remains for 2025 driven by wage pressure.

Recent data points push the prospect of rate cuts to being later and shallower. The BoE could cut before the Fed.

EQUITIES

​The VT Avastra Global Equity Fund returned -1.06% for the month and is +7.01% YTD. During the month we made the following adjustments to the fund:

• Increased allocations to Global Equities funded from Japanese equities as the momentum has stalled and the Yen trades at its lowest levels over the last decade.
• Moved from Industrials and Energy sectors into Health Care and Materials sectors.
• Sold out from Momentum Factor in favour of Minimum Volatility Factor as volatility remains high and there is a risk of a momentum crash.

The fund provides a “4-in-1” active allocation strategy across Regional, Sector, Factor and Manager strategies.

​BONDS

​ The VT Avastra Global Fixed Income Fund returned -1.16% for the month and is -0.13% YTD. During the month we made the following adjustments to the fund:

• Sold out from Global Aggregate bonds on the back of a hot US inflation print in favour of US Money Market funds as Fed rate cuts will likely be delayed as a result of sticker inflation.
  
• Closed out Emerging Market USD position as credit spreads are at their lowest.

The fund provides an active allocation approach to managing duration and credit quality exposure within the Bond sector

ALTERNATIVES

​The VT Avastra Global Alternatives Fund returned +0.19% for the month and is 2.89% YTD. There were no changes made to the allocations of the fund.

The fund provides both asset-based and risk-based diversification, as an alternative to equities and bonds.