May-24: Insights

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

May 2024 Update

​​For UK professional investors only 

MARKETS

Equity and bond markets recovered from April declines supported by strong earnings growth (equities) and outlook for interest rates and stronger Sterling (Bonds).

The Growth outlook is potentially diverging, with UK coming out of a technical recession, and the US starting to show signs of slowing of their resilient recovery.

Stickier-than-expected inflation data pushes the prospect of rate cuts slightly further out, with cuts likely to come from the ECB first, then the BoE, and then the Fed.

EQUITIES

​The VT Avastra Global Equity Fund returned +0.08% for the month and is +7.09% YTD. During the month we made the following adjustments to the fund: 

• Increased allocations to UK Equities as the economy has shown resilience and avoided most recessionary risks.
• Increased allocations to Emerging Market Equities as sentiment improves with potential growth within China as well. 

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 -0.44% YTD. During the month we made the following adjustments to the fund:

• Moved to a more positive view on UK Index-Linked gilts as rate cuts are on the horizon. 

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 3.35% YTD. During the month we made the following adjustments to the fund:

• Increased allocations to Clean Energy Infrastructure as most of the downside has already been priced in, funded from a reduction in Property markets. 
  
• Introduction of the Orbis Global Balanced Fund – which takes contrarian approach to investing. 

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