The Equitile Resilience Fund aims to deliver capital growth by investing in large, growing companies in the developed markets. It is managed according to our core investment principles and uses the Equitile Fair Fee Model.
Latest Overview GBP - May 2019 (print version)
Global equity markets and bond yields were pushed sharply lower in May, driven by heightened risk aversion in response to the unexpected breakdown in trade negotiations between the United States and China. In response, both sides have noticeably hardened their rhetoric and appear to be positioning for a prolonged conflict. If this situation persists, significant rearrangements of global supply chains should be expected, increasing earnings uncertainty for many companies and risk aversion. In the longer run however the more significant macroeconomic effect could be less global labour competition, giving developed-world workers a little more pricing power. Arguably the resultant combination of higher real-wage growth and easing of disinflationary pressures would be a healthy rebalancing of the economy. As always, the impact on the economy depends on the speed and magnitude of the adjustment; an extreme trade war would be negative for growth but some rebalancing in the rate of real wage growth, back toward the Western worker, would be positive. At present, we believe the positive effect of real wage growth is likely to more than outweigh the drag from any tariffs.
During the month the largest negative contributions to the fund’s returns came from your investments in the semiconductor sector, particularly your investments in Nvidia, Arista Networks and Texas Instruments.