February was yet another eventful month in the markets. Join William Hobbs, Head of Equity Strategy, and Rupert Howard, Senior Portfolio Manager, as they discuss the key issues currently impacting portfolios.

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A Greek exit from the Eurozone (a “Grexit”) remained a key risk over the month. Although Greece only makes up a relatively small proportion of the global economy, Rupert believes that a material deterioration in conditions could trigger a pick-up in volatility and some market corrections. However, markets appear to be taking things in their stride and contagion risks have diminished markedly since 2010-2012, resulting in a negligible impact in our portfolios.

Since early 2014, our portfolios have been overweight developed equity markets where the US has been the standout performer. Rupert points out that, recently, a combination of strong performance and very high optimism in the US has provided a good opportunity for profit-taking. Furthermore, the impact of a strong US dollar, which is being reflected in earnings reports, is making growth that much harder in the short term, supporting a re-allocation towards the increasingly attractive European equity markets.

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