Share markets continued to be somewhat choppy during September, despite positive fundamental signs in the main developed economies. The United States saw unemployment continue to fall and more firms looking to fill jobs, while business confidence in Europe suggests that growth there also remains on track. However markets were rattled by the US Federal Reserve’s decision to take a cautious view and hold off increasing interest rates (from zero), having some wariness following August’s market volatility, and overall global shares finished the month down 4%.
Should declines continue materially from here, we would expect the options protection included in Grosvenor portfolios to make a meaningful offsetting contribution to returns on global shares. Looking back over the past three months, it is useful to note that results on global shares have also been substantially supported by the New Zealand Dollar’s fall – global shares in NZD terms are still up 16% over the past year. This illustrates some of the benefits of a structured investment approach, built around measures to balance out shorter-term volatility while focusing on longer-term growth. Click here to read more.
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