Capturing equity gains whilst protecting portfolios Edward Park Q2 2018
MSCI North America Total Return in USD (2017 Discrete Calendar Months) 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0% 0.00% Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Source: Bloomberg data as at 09/04/2018 2
US Federal Reserve Balance Sheet vs VIX Index since start of 2017 4500000 40 4480000 35 4460000 30 4440000 25 4420000 20 4400000 15 4380000 10 4360000 5 4340000 0 Fed Balance Sheet VIX Source: Bloomberg data as at 03/04/2018 3
01/04/2008 01/07/2008 01/10/2008 01/01/2009 01/04/2009 01/07/2009 01/10/2009 01/01/2010 01/04/2010 01/07/2010 01/10/2010 01/01/2011 01/04/2011 01/07/2011 01/10/2011 01/01/2012 01/04/2012 01/07/2012 01/10/2012 01/01/2013 01/04/2013 01/07/2013 01/10/2013 01/01/2014 01/04/2014 01/07/2014 01/10/2014 01/01/2015 01/04/2015 01/07/2015 01/10/2015 01/01/2016 01/04/2016 01/07/2016 01/10/2016 01/01/2017 01/04/2017 01/07/2017 01/10/2017 01/01/2018 01/04/2018 US Average Hourly Earnings (Wage Growth) vs US Employment Rate (last 10 years (%)) 12 10 8 6 4 2 0 US Unemployment Rate US Average Hourly Earnings Source: Bloomberg data as at 01/04/2018 4
Source: Brooks Macdonald Research as at 01/04/2018 5
1 39 77 115 153 191 229 267 305 343 381 419 457 495 533 571 609 647 685 723 761 799 837 875 913 951 989 1027 1065 1103 1141 1179 1217 1255 1293 1331 1369 1407 1445 1483 1521 1559 1597 1635 1673 1711 1749 1787 1825 1863 1901 1939 1977 2015 2053 2091 2129 2167 2205 2243 2281 250 Beware of Bubbles 20000 18000 200 16000 14000 150 12000 10000 100 8000 6000 50 4000 2000 0 0 MSCI World Information Technology Index (Index Level LHS) Bitcoin ($ RHS) Source: Bloomberg data as at 03/04/2018 6
15.00 Bank Regulatory Capital to Risk-Weighted Assets for United States (Shaded Areas indicate Recessions) 14.50 14.00 13.50 13.00 12.50 12.00 Source: Federal Reserve Bank of St. Louis as at 01/01/2015 7
2009 2010 2011 2012 2013 2014 2015 2016 2017 EM 78.5 68.9 59.4 32.6 DM 30.0 UK 29.8 US 28.0 23.7 21.2 corp 19.2 9.1 3.3 1.9 0.6 19.4 EM 18.9 17.6 US 16.6 14.8 14.7 UK 14.1 DM 11.8 9.6 5.9 corp 5.8 1.6 0.6 8.1 6.2 corp 4.3 3.1 US 0.6-1.2 UK -3.0 DM -5.5-8.2-14.8-15.3 EM -18.4-18.7 22.0 21.6 21.3 19.6 EM 18.2 DM 15.8 US 15.7 UK 12.2 corp 11.2 8.0 2.3 2.0-3.4 54.6 US 32.7 27.6 DM 26.7 UK 2 11.0 7.9 7.3 3.8 corp 0.3 EM -2.6-4.3-4.8 19.5 US 11.8 9.5 5.5 DM 4.9 3.2 corp 3.1 UK 0.0-1.0 EM -2.2-6.5-17.9 13.9 9.9 2.6 UK 0.0 US 0.0-0.6 DM -0.9-2.7 corp -3.6-3.7-9.5 EM -14.9-23.3 UK 17.4 14.3 US 12.0 EM 11.2 9.6 DM 7.5 6.2 5.1 corp 4.3 2.6 1.7 0.4-0.6-0.7 Equities 42.2 EM Equities 37.3 Equities 26.8 DM Equities 22.4 US Equities 20.6 Equities 19.7 UK Equities 13 11.2 10.4 10 Inv Grade Corp Bonds 9.1 7.5 1.7 0.3 Asset class returns (in local currencies) between 2009 and 2017. Source: Morningstar 8
Source: istock 9
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Source: Brooks Macdonald Research as at 01/01/2018 11
Important information This document is intended for professional advisers only and should not be relied upon by any persons who do not have professional experience in matters relating to investments. All data provided by Brooks Macdonald, unless otherwise stated, as at 30.09.16. The value of your investments and the income from them may go down as well as up. You may get back less than you invested. Past performance is not a guide to future performance. Brooks Macdonald is a trading name of Brooks Macdonald Group plc used by various companies in the Brooks Macdonald group of companies. Brooks Macdonald Group plc is registered in England No 4402058. Registered office: 72 Welbeck Street London W1G 0AY. Brooks Macdonald Asset Management Limited is authorised and regulated by the Financial Conduct Authority. Registered in England No 3417519. Registered office: 72 Welbeck Street London W1G 0AY. More information about the Brooks Macdonald Group can be found at www.brooksmacdonald.com. 12