Sep-24: Insights

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

September 2024 Update

​​For UK professional investors only 

MARKETS

​Equity markets gained on a “jumbo” 50bp policy rate cut by the US Fed and the prospect of a “soft landing” for the economy.

Sterling’s strength against the Dollar on the UK’s relatively higher interest rate outlook compared to the US created a headwind for Equities and a tailwind for Bonds.

Geopolitical tensions - in the Middle East and in Ukraine - create a higher risk to inflation than to economic growth. 

EQUITIES

​The VT Avastra Global Equity Fund returned -0.25% for the month and is +9.08% YTD. During the month we made the following adjustments to the fund:

• Reduced allocations to UK equities as faster paced Fed rate cuts favour Global Markets.
  
• Introduced Virtus US S/Mid Cap fund in place of Vulcan US Value fund.
  
• Sector switches to introduce allocations to Materials, Industrials, Financials, and IT
  
• Switched out from Min. Volatility to Momentum Factor 

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 +0.11% for the month and is +1.73% YTD. During the month we made the following adjustments to the fund:

• Reduced allocations from Uk corporate bonds in favour of US TIPS as aggressive Fed rate cuts could reignite inflation, therefore locking 2% real yields remains prudent. 

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 +1.33% for the month and is +7.26% YTD. During the month we made the following adjustments to the fund:

• Increased allocations to Gold as Emerging Central banks continue to stockpile their reserves and US debt spending could place downward pressure on the US Dollar.
  
• Reduced allocations from MAN GLG Alpha Select Alternative and Lyxor Money Market. 

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