News & Insights

The impact of President Trump’s executive actions continued to reverberate through markets during February.

US equities fell 1.6% in US dollars on the back of impending tariffs, geopolitical tensions and a resulting drop in consumer confidence. World equities declined by 0.7% in US dollars, dragged down by the fall in US stocks, but good gains were made outside of the US.

Large cap UK and European equities continued their strong run since the start of the year, posting positive returns for the month and taking year to date returns in local currencies to 8% and 11% respectively. Value stocks outperformed growth, with defensive sectors such as consumer staples, utilities and pharmaceuticals posting good gains.

In bond markets, weaker than expected economic data led to a 20bp – 30bp fall in US Treasury yields. Bond yields in Europe also traded marginally lower over the course of the month. The pound ended the month approximately 1% higher against the dollar and the euro but otherwise foreign exchange movements were minimal.

Returns experienced by investors will have been mixed across currencies and risk profiles. Sterling denominated portfolios will have underperformed due to currency strength and the relatively poor performance of UK small and mid cap equities.