December 2016 Performance
The “Trump Rally” has confounded the bearish predictions contrived by many of the same financial market experts that had precipitately forecasted a sharp slowdown in the UK following the Brexit vote. There has been no mass exodus away from risk-assets. In fact, just the opposite has occurred. Investors have taken a more optimistic view and large-cap equity markets in the US and UK have risen to all-time highs. The outlook for growth remains positive and global GDP has returned to the long-term trend line of 4%. The recovery is likely to be sustainable given that the Chinese economy is growing at an annual rate of 6.70% and the President-elect plans to invest in large-scale infrastructure projects. In December, the MSCI World rose 2.29% and the FTSE 100 gained 5.29% to close the year up 14.43%. The Nikkei 225 climbed 4.40% and the Dow Jones Industrial Average rose 3.34% to finish at the highest level in its 120-year history. The transition to a higher rate environment has begun as the US Federal Reserve raised interest rates by 25 bps and adopted a more hawkish stance. The Bank of England left rates unchanged and reiterated its concern that inflation is set to rise above the target range of 2%. A short covering rally in the US treasury and UK gilt markets supported bond prices and ten-year rates closed at 2.43% and 1.24% respectively. The upward trend for the US dollar continues unabated. It appreciated 2.12% versus the Japanese yen and 1.34% against sterling. Commodity prices increased and the GSCI rose 4.60% with much of the gains coming from the energy spectrum. Light crude oil climbed 8.66% and natural gas surged 11.10% following OPEC’s agreement to restrict output. Looking ahead, further rotation out of bonds and into global equities will be the dominant investment theme in 2017 as inflation returns with a vengeance.
Tavistock PROFILE 3
Tavistock PROFILE 3 returned 1.25% in December and the IA Mixed Investment 0-35% Shares sector rose 1.61%. The profile has returned 9.00% year to date and 10.14% since inception on 1st October 2015.
Tavistock PROFILE 4
Tavistock PROFILE 4 returned 1.49% in December and the IA Mixed Investment 20-60% Shares sector rose 2.17%. The profile has returned 9.87% year to date and 11.70% since inception on 1st October 2015.
Tavistock PROFILE 5
Tavistock PROFILE 5 returned 2.00% in December and the IA Mixed Investment 20-60% Shares sector rose 2.17%. The profile has returned 12.03% year to date and 14.98% since inception on 1st October 2015.
Tavistock PROFILE 6
Tavistock PROFILE 6 returned 2.13% in December and the IA Mixed Investment 40-85% Shares sector rose 2.58%. The profile has returned 13.11% year to date and 16.88% since inception on 1st October 2015.
Tavistock PROFILE 7
Tavistock PROFILE 7 returned 2.47% in December and the IA Flexible Investment sector rose 2.53%. The profile has returned 14.13% year to date and 18.70% since inception on 1st October 2015.
Tavistock PROFILE 8
Tavistock PROFILE 8 returned 2.85% in December and outperformed the IA Flexible Investment sector, which rose 2.53%. The profile has returned 17.21% year to date and 22.08% since inception on 1st October 2015.