Our Investment Update

With so much having been written about the Election over the weekend, we have no intention of adding more than is absolutely necessary.  Despite what some seem to think, the world has not ended with the loss of the Conservative majority.  And the equity market reaction would seem to reflect this – the FTSE 100 closed down a mere 0.27% on the week.  Of course, the story there is the usual “they earn so much from overseas that they’re not really UK companies and a weak pound is good for them.”  Fair enough but, interestingly, the more domestically focused FTSE 250 fell by only 1.16%.  Added to that is the 11.49% return from the FTSE 250 over the last six months as compared to 8.24% for the FTSE100.  Arguably, a bit of froth got blown off the top.

More importantly will be the coming months when we get more of a feel for consumer spending.  In addition to some scaremongering over business confidence this morning, news from VISA suggested consumer spending is falling.  One data item does not make a trend so in isolation this is of limited value.  Should it become a trend, though, then that would be of more concern.  Consumer spending is some 60% of the UK’s GDP so it matters a lot and a sharp fall could trigger a recession.

After such an unashamedly parochial focus on the UK recently, we will be looking at our overall positioning over the course of this week.  Quite frankly, it will be something of a relief to get away from the political noise and to focus on the other underlying factors driving markets.  We still believe there are some important themes in markets, including the resurgence of emerging economies, the increased interest in European equities and what the future holds for the US.  We will share the outcome of those deliberations soon.

Regulatory Notice

European Wealth is a trading style of European Investment Management Limited (registered number 06931664) which is incorporated and registered in England and Wales with registered office at Ellenborough House, Wellington Street, Cheltenham, Gloucestershire GL50 1YD and authorised and regulated by the Financial Conduct Authority.  This message contains information that is confidential and privileged and it must not be distributed to any third party either whole or in part. If you are not the intended recipient, please advise the sender immediately and delete this message. This message is not to be construed as a solicitation or offer to buy or sell securities and does not in any way constitute investment advice, nor should it be used as the basis for any investment decision. The information contained in this message has been prepared using all reasonable care. However, it is not guaranteed as to its accuracy, and it is published solely for information purposes. Our opinions are subject to change without notice and we are not under any obligation to update or keep this information current.

Risk Warnings

The investments discussed in this message may not be suitable for all investors. European Wealth does not guarantee the performance of any investments. Past performance is not necessarily a guide to future performance. The value of investments may go up or down and you may not get back the amount you have invested. The income from an investment is not fixed and may fluctuate. The value of an investment involving exposure to foreign currencies can be affected by exchange rate movements which may cause the value of the investment to go up or down. European Wealth and/or its affiliated companies and/or their employees may, from time to time, hold shares or holdings in the securities discussed in this message and may as agent buy or sell those securities.

Restricted Investors

This document is not, and under no circumstances is to be construed as, an advertisement, or any other step in furtherance of a public offering of shares in the United States or Canada. This document is not aimed at persons who are resident in the United States, Canada or any province or territory thereof.

Our Investment Update

The outcome of the General Election has turned out to be probably the worst possible from the perspective of investors.  This is not a political observation, simply recognition that we now have a raft of uncertainties ahead of us.  It is little surprise that sterling has fallen, or that the larger UK companies, with strong overseas earnings, opened higher and the more domestic-oriented medium sized companies slipped back.  The question, though, is what do we do now?

In order to answer this, we need to consider where we are.  Overall, the UK economy has been in pretty good shape.  Despite some dire predictions, it has actually proved to be one of the stronger global economies.  There are, though, some challenges.  However, this growth has slowed recently and there are some worries over consumer confidence.  The prospect of a tax and spend government may have receded, for now, but a slowdown in consumer spending would not be good news.  The concern is that it might translate into a recession – not necessarily a bad one but, nonetheless, not something investors would welcome.

Reacting too quickly in circumstances like this is not always the wisest thing to do.  To be clear, this is not a crisis – no matter how much some parts of the media may want to build it up to be.  We want to reflect carefully on the medium and longer term implications before taking action.  This outcome was one that we had specifically considered and we had reviewed our positioning accordingly.  Our larger companies’ exposure, together with our international – particularly our US dollar exposure – should be real beneficiaries today.  Our focus now will be on how best to adapt our positioning to address the coming months rather than days.

Regulatory Notice

European Wealth is a trading style of European Investment Management Limited (registered number 06931664) which is incorporated and registered in England and Wales with registered office at Ellenborough House, Wellington Street, Cheltenham, Gloucestershire GL50 1YD and authorised and regulated by the Financial Conduct Authority.  This message contains information that is confidential and privileged and it must not be distributed to any third party either whole or in part. If you are not the intended recipient, please advise the sender immediately and delete this message. This message is not to be construed as a solicitation or offer to buy or sell securities and does not in any way constitute investment advice, nor should it be used as the basis for any investment decision. The information contained in this message has been prepared using all reasonable care. However, it is not guaranteed as to its accuracy, and it is published solely for information purposes. Our opinions are subject to change without notice and we are not under any obligation to update or keep this information current.

Risk Warnings

The investments discussed in this message may not be suitable for all investors. European Wealth does not guarantee the performance of any investments. Past performance is not necessarily a guide to future performance. The value of investments may go up or down and you may not get back the amount you have invested. The income from an investment is not fixed and may fluctuate. The value of an investment involving exposure to foreign currencies can be affected by exchange rate movements which may cause the value of the investment to go up or down. European Wealth and/or its affiliated companies and/or their employees may, from time to time, hold shares or holdings in the securities discussed in this message and may as agent buy or sell those securities.

Restricted Investors

This document is not, and under no circumstances is to be construed as, an advertisement, or any other step in furtherance of a public offering of shares in the United States or Canada. This document is not aimed at persons who are resident in the United States, Canada or any province or territory thereof.

Our Investment Update

In US dollar terms, global equity markets enjoyed yet another good week – although translated into sterling things looked slightly weaker.  The major US indices saw more record highs and, in Japan, both the TOPIX and the Nikkei moved sharply higher.  Expectations of volatility, reflected in the VIX Index, remain low and that niggling feeling that things might be a bit too complacent is not going away.

Clearly, for UK investors the focus is on the forthcoming General Election although campaigning has rightly been pushed into the background by recent horrific events.   With days to go now, the usual questions of what will happen to which assets under a variety of scenarios are being asked.  As is also usually the case, these are of limited value and things are unlikely to change radically whatever the outcome.  The one area that is expected see a reaction is the Pound sterling.  But, again, will it react the way the pundits claim?  Quite possibly not…

Amid all of this the temptation to sit on your hands and do nothing is very strong.  But it is not the right thing to do and we are continuing our programme of adding to our emerging markets positions.  This might seem at odds with our fears that things are too complacent – surely that implies there may be a pullback and a lower entry point?  That is, of course, possible – but micro timing markets is foolhardy and we remain focussed on strong markets and longer term fundamentals rather than short term guesses.

Regulatory Notice

European Wealth is a trading style of European Investment Management Limited (registered number 06931664) which is incorporated and registered in England and Wales with registered office at Ellenborough House, Wellington Street, Cheltenham, Gloucestershire GL50 1YD and authorised and regulated by the Financial Conduct Authority.  This message contains information that is confidential and privileged and it must not be distributed to any third party either whole or in part. If you are not the intended recipient, please advise the sender immediately and delete this message. This message is not to be construed as a solicitation or offer to buy or sell securities and does not in any way constitute investment advice, nor should it be used as the basis for any investment decision. The information contained in this message has been prepared using all reasonable care. However, it is not guaranteed as to its accuracy, and it is published solely for information purposes. Our opinions are subject to change without notice and we are not under any obligation to update or keep this information current.

Risk Warnings

The investments discussed in this message may not be suitable for all investors. European Wealth does not guarantee the performance of any investments. Past performance is not necessarily a guide to future performance. The value of investments may go up or down and you may not get back the amount you have invested. The income from an investment is not fixed and may fluctuate. The value of an investment involving exposure to foreign currencies can be affected by exchange rate movements which may cause the value of the investment to go up or down. European Wealth and/or its affiliated companies and/or their employees may, from time to time, hold shares or holdings in the securities discussed in this message and may as agent buy or sell those securities.

Restricted Investors

This document is not, and under no circumstances is to be construed as, an advertisement, or any other step in furtherance of a public offering of shares in the United States or Canada. This document is not aimed at persons who are resident in the United States, Canada or any province or territory thereof.

Our Investment Update

Global equity markets enjoyed another good week – especially in the US, where record highs were seen again.  It was good to see this based upon good earnings numbers and more good economic data.  This positive economic tone was underlined by the International Monetary Fund which has revised its forecasts for global growth from 3.1% to 3.5%.  With the UK now said to be in line for 2.0% growth, we are reassured to see our confidence in the domestic economy being reinforced.

We have been holding a thematic bias towards global equity income for some time now which has performed strongly.  We accept, of course, that much of this has been currency related given the US bias in this exposure.  Equity income has been very attractive for those seeking yield, given the pathetic yields available for more traditional fixed income investments.  Looking forward, though, whilst not negative we do feel there are other opportunities where we can achieve better returns and so we are going to take profits here and reduce our exposure.

In terms of the opportunities, we are still favouring emerging markets.  Having been, arguably, somewhat early to build our positions in these markets, more recently we have seen a resurgence of interest amongst investors.  The flow of funds into these markets has been substantial and they have responded by showing solid gains in many cases.  As this has happened, we have adjusted our exposures and, most recently, we have also brought in a focus on Russia and have built in a bias towards the improving frontier markets.  We intend to use the proceeds from our profit-taking in the equity income positions to add to both our broader emerging markets positions and also to the frontier positions, where we believe there is less correlation to developed market equities.  This move might be seen as adding a bit more risk into the mix, given the more volatile characteristics of emerging markets.

We remain mindful of asset valuations, the geo political background and, of course, the forthcoming General Election.  All of these could give reasons for pull backs in the short term but we remain focussed on the underlying good news.  We are doing this very much with our eyes open and the overall impact, given the previous steps we have taken to de-risk our overall exposure is something we are very comfortable with.

Regulatory Notice

European Wealth is a trading style of European Investment Management Limited (registered number 06931664) which is incorporated and registered in England and Wales with registered office at Ellenborough House, Wellington Street, Cheltenham, Gloucestershire GL50 1YD and authorised and regulated by the Financial Conduct Authority.  This message contains information that is confidential and privileged and it must not be distributed to any third party either whole or in part. If you are not the intended recipient, please advise the sender immediately and delete this message. This message is not to be construed as a solicitation or offer to buy or sell securities and does not in any way constitute investment advice, nor should it be used as the basis for any investment decision. The information contained in this message has been prepared using all reasonable care. However, it is not guaranteed as to its accuracy, and it is published solely for information purposes. Our opinions are subject to change without notice and we are not under any obligation to update or keep this information current.

Risk Warnings

The investments discussed in this message may not be suitable for all investors. European Wealth does not guarantee the performance of any investments. Past performance is not necessarily a guide to future performance. The value of investments may go up or down and you may not get back the amount you have invested. The income from an investment is not fixed and may fluctuate. The value of an investment involving exposure to foreign currencies can be affected by exchange rate movements which may cause the value of the investment to go up or down. European Wealth and/or its affiliated companies and/or their employees may, from time to time, hold shares or holdings in the securities discussed in this message and may as agent buy or sell those securities.

Restricted Investors

This document is not, and under no circumstances is to be construed as, an advertisement, or any other step in furtherance of a public offering of shares in the United States or Canada. This document is not aimed at persons who are resident in the United States, Canada or any province or territory thereof.

Our Investment Update

Last week saw most equity markets little changed, despite some wobbles resulting from US politics.  These concerns led to a sharp bounce in the VIX Index,  a small bounce in precious metals and also to some weakness in the US dollar.  Oil had a stronger week amid stories that production curbs would be retained.

Politics does seem to be dominating things at the moment.  In the US, President Trump’s problems over who said what to the Russians rumbles on in what is, apparently, the “single greatest witch hunt of a politician in American history”.  Whether that is true or not, it does seem to be something of a rallying call for the anti-Trump campaigners.  Inevitably, the US dollar has suffered and the equity market has not escaped either.  But, yet again, this noise is drowning out more good news from the US economy.  And it is the economy that matters the most because, if things continue as they are, the Federal Reserve should be able to maintain the measured and gentle increase in interest rates.

Europe has not escaped its share of political noise either.  Here, though, it has not all been such bad news.  For German Chancellor Merkel, the signs bode well for her Christian Democratic Union party who continue to do well and she should be feeling more relaxed about the forthcoming federal elections.  In France, President Macron has appointed a centre right prime minister.  An attempt to win over centre right votes in next month’s elections?  Given he has no real ‘party’ then probably, yes.  And who can forget the UK election and Brexit?  Once again, though, noise and reality need to be separated.  Europe seems to be being hailed as the next ‘sure thing’ for investors.  Really?  We accept that many of the numbers have been good – and better than the UK and US – but we are still not convinced that all of the Euro area’s problems have gone away.

In a world of 24 hour media, most people expect a certain amount of narcissistic preening from politicians.  That markets have, so far at least, reacted so sanguinely could mean one of two things.  Either that investors are too relaxed and are not realizing the scale of the risks out there.  Or that investors are looking through the noise and smoke to focus on more fundamental economic realities.  In fairness, it may well be a bit of both, but we are very much in the latter camp.  We accept that many assets are looking pricey and that the days of picking the low hanging fruit have gone for the time being.  We also accept that there is a real possibility of what looks like just noise at the moment, turning into either a short term ‘risk off’ phase or even a mini crisis – and that could give equity markets a short, sharp shock.  But, as we have said before, that is part and parcel of investing and we remain driven by medium and longer term opportunities.

Regulatory Notice

European Wealth is a trading style of European Investment Management Limited (registered number 06931664) which is incorporated and registered in England and Wales with registered office at Ellenborough House, Wellington Street, Cheltenham, Gloucestershire GL50 1YD and authorised and regulated by the Financial Conduct Authority.  This message contains information that is confidential and privileged and it must not be distributed to any third party either whole or in part. If you are not the intended recipient, please advise the sender immediately and delete this message. This message is not to be construed as a solicitation or offer to buy or sell securities and does not in any way constitute investment advice, nor should it be used as the basis for any investment decision. The information contained in this message has been prepared using all reasonable care. However, it is not guaranteed as to its accuracy, and it is published solely for information purposes. Our opinions are subject to change without notice and we are not under any obligation to update or keep this information current.

Risk Warnings

The investments discussed in this message may not be suitable for all investors. European Wealth does not guarantee the performance of any investments. Past performance is not necessarily a guide to future performance. The value of investments may go up or down and you may not get back the amount you have invested. The income from an investment is not fixed and may fluctuate. The value of an investment involving exposure to foreign currencies can be affected by exchange rate movements which may cause the value of the investment to go up or down. European Wealth and/or its affiliated companies and/or their employees may, from time to time, hold shares or holdings in the securities discussed in this message and may as agent buy or sell those securities.

Restricted Investors

This document is not, and under no circumstances is to be construed as, an advertisement, or any other step in furtherance of a public offering of shares in the United States or Canada. This document is not aimed at persons who are resident in the United States, Canada or any province or territory thereof.

Our Investment Update

So the French election is out of the way and we have, apparently, avoided a catastrophe.  Whatever the spin put on it by those with a political axe to grind, what will be more interesting will be the French Parliamentary elections in a month’s time.  President Macron has no ‘party’ as such, so things may prove challenging in the future.  We expect, initially at least, this result will reinforce the Europe equity bulls – whose cause seems to be helped by further good data on economic growth.  We are more skeptical medium term and will remain underweight, with a clear focus on northern European economies.

Turning to the United States, another interest rate rise in the near future seems to be on the cards.  The underlying economy continues to grow and so this should not, necessarily, be seen as a bad thing.  We do wonder, though, whether the widely publicized stimuli from spending on infrastructure and tax cuts will have quite as much of an impact as was originally heralded?  Or will it, in fact, come simply from the continuation of the current cycle?  Either way, we still want to retain our US equity exposure – and our US dollar exposure.  And we are still focused on a more domestic bias in the face of continuing consumer confidence and expectations of further dollar strength.

Property has been an area we have been watching for some time.  Some two years ago we warned of an impending liquidity crisis in bricks and mortar property funds and sold our positions.  And the expected crisis did, indeed come to pass.  We retained our more liquid property securities positions at that time.  Now, however, we are selling these, too.  Do we expect another crisis?  In short, no.  But we do see property as a ‘leveraged bet’ on bonds – and we have disliked bonds for some time.  We feel the time is right to take the profits we see in this now expensive asset class and seek other opportunities.

Our sense of optimism remains intact.  So far, at least, we have not been irradiated, nor has Europe reverted to the 1930s.  Instead, we see the global economy remaining solid and see some real opportunities in areas such as Asia and emerging markets for future good returns.  We still see the possibility of short term uncertainty or, worse, sharp sell offs.  But that is nothing new and is, in our view, part and parcel of investing.

Regulatory Notice

European Wealth is a trading style of European Investment Management Limited (registered number 06931664) which is incorporated and registered in England and Wales with registered office at Ellenborough House, Wellington Street, Cheltenham, Gloucestershire GL50 1YD and authorised and regulated by the Financial Conduct Authority.  This message contains information that is confidential and privileged and it must not be distributed to any third party either whole or in part. If you are not the intended recipient, please advise the sender immediately and delete this message. This message is not to be construed as a solicitation or offer to buy or sell securities and does not in any way constitute investment advice, nor should it be used as the basis for any investment decision. The information contained in this message has been prepared using all reasonable care. However, it is not guaranteed as to its accuracy, and it is published solely for information purposes. Our opinions are subject to change without notice and we are not under any obligation to update or keep this information current.

Risk Warnings

The investments discussed in this message may not be suitable for all investors. European Wealth does not guarantee the performance of any investments. Past performance is not necessarily a guide to future performance. The value of investments may go up or down and you may not get back the amount you have invested. The income from an investment is not fixed and may fluctuate. The value of an investment involving exposure to foreign currencies can be affected by exchange rate movements which may cause the value of the investment to go up or down. European Wealth and/or its affiliated companies and/or their employees may, from time to time, hold shares or holdings in the securities discussed in this message and may as agent buy or sell those securities.

Restricted Investors

This document is not, and under no circumstances is to be construed as, an advertisement, or any other step in furtherance of a public offering of shares in the United States or Canada. This document is not aimed at persons who are resident in the United States, Canada or any province or territory thereof.

Our Investment Perspective

A Glass Half Empty?

For those who’s glass is half empty, there is plenty to be morose about. Politics is the first area of concern.  The run up to a General Election always causes a mass of speculation.  But, add Brexit into the mix, and the whole thing has become a never ending stream of noise.  In Europe, it is not just the Brexit story but the forthcoming French elections and worries over those later this year in Italy and Germany.  Oh, and do not forget Greece – it has not gone away yet.  As for America, the Trump Effect seems to lurch from good to bad in a matter of days.  Then, of course, we have imminent nuclear destruction as the stand off over North Korea drags on.  That does rather make news that the Chinese economy may be slowing slightly pale, somewhat, into insignificance.  It certainly seems there are plenty of reasons to take risk off the table.

Or a Glass Half Full?

Interestingly, despite the volume of bad news, investors have remained pretty positive. Equity markets have largely moved higher and there is a sense of more good things to come.  Despite the occasional blip – we mentioned the recent Chinese data earlier – the flow of macro news has mostly been good.  That it has not been fantastic is also, in a way, a good thing.  Why?  Well, because it allows central banks to move towards ‘normalising’ interest rates at a measured pace and avoid the risk of nasty sharp, rate hikes.  That said, quite what ‘normal’ looks like at the moment is subject to much debate.  In any event, we see plenty of reasons not to take risk off the table.  In fact, we see reasons to keep risk on the table.  After all, whether the glass is half full or half empty, as the saying goes “there is still room for more beer.”

Topping It Up

As a result of this view, we have been quietly adding to a number of our positions. We have topped up our positions in the UK, where we are invested across all market sizes but with a bias on the medium sized to larger companies.  Despite all of the negativity, it remains entirely possible that Prime Minister May has a cunning plan for Brexit and we view much of the European criticisms as little more than posturing.  The recent UK economic growth numbers were low, yes – and the expected growth numbers for the Euro area are likely to be twice as high.  But we do not believe that the UK economy is hobbling along.  We still view it as robust and our mid cap domestically focused positions are a reflection of this.

We have also continued to top up our emerging markets positions. Here, we have a bias towards the frontier markets which we believe offer the most attractive set of opportunities.  Of course such positions come with a degree of increased volatility.  However, the lack of correlation between these markets brings a diversification effect too.  We have funded this top up through a slight reduction in our Japanese exposure – the only place we have taken equity money off the table recently.

Elsewhere, our equity and fixed income positions remain unchanged. We are still keeping an allocation to precious metals as a hedge.  Despite our optimism, we are only too aware of the likelihood of sharp pull backs, particularly at these levels.  Some of the potential triggers for these were covered in our opening and there are, doubtless, other unexpected ones out there.  But such pull backs, for us, would remain entry points and a chance to further deploy uninvested cash.

Regulatory Notice

European Wealth is a trading style of European Investment Management Limited (registered number 06931664), European Wealth Trading Limited which is a member of the London Stock Exchange (registered number 03109469), and European Financial Planning Limited (registered number 01265376), each incorporated and registered in England and Wales with registered office at Ellenborough House, Wellington Street, Cheltenham, Gloucestershire GL50 1YD and authorised and regulated by the Financial Conduct Authority. European Wealth (Switzerland) SA is a member of the Swiss General Self Regulatory Organization PolyReg SA.  All these companies are wholly owned subsidiaries of European Wealth Group Limited (registered number 42316) which is incorporated in Guernsey with registered office at Mill Court, La Charroterie, St Peter Port, Guernsey GY1 3QZ.  This document contains information that is confidential and privileged and it must not be distributed to any third party either whole or in part.  If you are not the intended recipient, please advise the sender immediately and delete this document.  This document is not to be construed as a solicitation or offer to buy or sell securities and does not in any way constitute investment advice, nor should it be used as the basis for any investment decision.  The information contained in this document has been prepared using all reasonable care.  However, it is not guaranteed as to its accuracy, and it is published solely for information purposes. Our opinions are subject to change without notice and we are not under any obligation to update or keep this information current.

Risk Warnings

The investments discussed in this document may not be suitable for all investors. European Wealth does not guarantee the performance of any investments. Past performance is not necessarily a guide to future performance. The value of investments may go up or down and you may not get back the amount you have invested.  The income from an investment is not fixed and may fluctuate.  The value of an investment involving exposure to foreign currencies can be affected by exchange rate movements which may cause the value of the investment to go up or down.  European Wealth and/or its affiliated companies and/or their employees may, from time to time, hold shares or holdings in the securities discussed in this document and may as agent buy or sell those securities.

Restricted Investors

This document is not, and under no circumstances is to be construed as, an advertisement, or any other step in furtherance of a public offering of shares in the United States or Canada. This document is not aimed at persons who are resident in the United States, Canada or any province or territory thereof.

 

European Wealth Group opens South African office

European Wealth, the specialist wealth management group, has announced the opening of an office in South Africa. The move follows its recent acquisition of a client bank from Towry Asset Management.  Many of the clients involved are based in Southern Africa and this office reflects European Wealth’s commitment to servicing clients locally. Click HERE for details

Our Investment Update

Last week saw a continuation of the more relaxed mood among investors.  Most equity markets moved slightly higher and volatility remained low.  Interestingly, there seems to be a change of tone among the more bearish market commentators.  They are not necessarily turning bullish but the ‘hold on for now despite the valuations’ theme seems more prevalent.

Last week also saw Prime Minister Theresa May notify the European Union that the UK will be leaving.  As expected, there was little impact on markets.  The tone of the political rhetoric has, if anything calmed down.  For how long that lasts, though, remains to be seen.  We still prefer to focus on the real issues facing the UK economy and that, beyond peradventure, leaves us continuing to prefer equities over bonds.  As we mentioned last week, we are reviewing our positioning within the UK equity market in order to seek the best opportunities the coming months may present.

The pullbacks that we have warned of have singularly failed to appear.  So does this make us more relaxed or more nervous?  As things stand, we do not feel more nervous.  There are things out there that could rock the boat – and they remain the same things we have flagged up before.  Chinese macro data.  Central bank actions.  And geopolitics.  So far, though, none of these show signs of significant deterioration.  That said, we are not entirely relaxed either.  There seems to be a degree of complacency creeping in and this is always a sign to be on your guard.  Being prudent when many asset prices are stretched is never a bad thing.

Regulatory Notice

European Wealth is a trading style of European Investment Management Limited (registered number 06931664) which is incorporated and registered in England and Wales with registered office at Ellenborough House, Wellington Street, Cheltenham, Gloucestershire GL50 1YD and authorised and regulated by the Financial Conduct Authority.  This message contains information that is confidential and privileged and it must not be distributed to any third party either whole or in part. If you are not the intended recipient, please advise the sender immediately and delete this message. This message is not to be construed as a solicitation or offer to buy or sell securities and does not in any way constitute investment advice, nor should it be used as the basis for any investment decision. The information contained in this message has been prepared using all reasonable care. However, it is not guaranteed as to its accuracy, and it is published solely for information purposes. Our opinions are subject to change without notice and we are not under any obligation to update or keep this information current.

Risk Warnings

The investments discussed in this message may not be suitable for all investors. European Wealth does not guarantee the performance of any investments. Past performance is not necessarily a guide to future performance. The value of investments may go up or down and you may not get back the amount you have invested. The income from an investment is not fixed and may fluctuate. The value of an investment involving exposure to foreign currencies can be affected by exchange rate movements which may cause the value of the investment to go up or down. European Wealth and/or its affiliated companies and/or their employees may, from time to time, hold shares or holdings in the securities discussed in this message and may as agent buy or sell those securities.

Restricted Investors

This document is not, and under no circumstances is to be construed as, an advertisement, or any other step in furtherance of a public offering of shares in the United States or Canada. This document is not aimed at persons who are resident in the United States, Canada or any province or territory thereof.

Our Investment Update

The news that the vote on the American Health Care Act had been withdrawn saw equity markets pull back.  On the surface it was, apparently, because of the threat to President Trump’s economically supportive agenda.  That said, some of the noise about it was a bit excessive.  Given the levels markets were at, some sort of pullback had been looking increasingly likely for quite a while so it should hardly have been a surprise.

This week should, finally, see Prime Minister Theresa May notify the European Union that the UK will be leaving.  The event is largely symbolic and so should not have much, if any, impact on markets.  The media will, of course, go into overdrive.  With two years of negotiations ahead there is a long way to go.  However, there is already speculation over a slowdown in the rate of UK economic growth – just as inflation has started to pick up.  This would raise some questions over which are the best parts of the UK equity market to be in.  Arguably, the larger companies in the FTSE100 Index, with a value bias and higher international exposure might be preferable to those with a more domestic bias.  This is something we shall be looking at over the coming weeks.

As for Europe, the positive trend of data continues.  Recent purchasing managers’ indices were at six year highs last week.  With German Chancellor Angela Merkel comfortably winning the recent state election, and increasing hopes that a centrist candidate will win the French elections, some of the political risk seems to have been put to one side.  For now.  We are still watching things closely and do not feel, yet, that all is quite as cosy as it could be.

With global growth remaining solid we are remaining overweight equities.  As we have said many times before, the probability of a pullback remains, in our view, quite high since many valuations are stretched.  However, we do not want to get caught out trying to micro time markets.  We are very comfortable with our current positioning and are actively looking for opportunities to buy equities at lower levels.

Regulatory Notice

European Wealth is a trading style of European Investment Management Limited (registered number 06931664) which is incorporated and registered in England and Wales with registered office at Ellenborough House, Wellington Street, Cheltenham, Gloucestershire GL50 1YD and authorised and regulated by the Financial Conduct Authority.  This message contains information that is confidential and privileged and it must not be distributed to any third party either whole or in part. If you are not the intended recipient, please advise the sender immediately and delete this message. This message is not to be construed as a solicitation or offer to buy or sell securities and does not in any way constitute investment advice, nor should it be used as the basis for any investment decision. The information contained in this message has been prepared using all reasonable care. However, it is not guaranteed as to its accuracy, and it is published solely for information purposes. Our opinions are subject to change without notice and we are not under any obligation to update or keep this information current.

Risk Warnings

The investments discussed in this message may not be suitable for all investors. European Wealth does not guarantee the performance of any investments. Past performance is not necessarily a guide to future performance. The value of investments may go up or down and you may not get back the amount you have invested. The income from an investment is not fixed and may fluctuate. The value of an investment involving exposure to foreign currencies can be affected by exchange rate movements which may cause the value of the investment to go up or down. European Wealth and/or its affiliated companies and/or their employees may, from time to time, hold shares or holdings in the securities discussed in this message and may as agent buy or sell those securities.

Restricted Investors

This document is not, and under no circumstances is to be construed as, an advertisement, or any other step in furtherance of a public offering of shares in the United States or Canada. This document is not aimed at persons who are resident in the United States, Canada or any province or territory thereof.