20 December 2019
Seven Insurance Brokers Logo
Seven Insurance Brokers Logo

Seven Insurance Brokers Market Update
Powered By
VAM Funds

Welcome to our weekly newsletter, where the Manager summarises the key market developments over the last seven days.

The Noise

Andrew Bailey has been announced as the next Bank of England boss this week. The ex-FCA chief is now tasked with steering the world’s fifth biggest economy and complex financial services industry through Brexit. In Mark Carney’s penultimate rate-setting meeting this week, the BoE voted to keep rates steady rather than make a pre-emptive cut.

The US House of Representatives impeached President Trump this week on charges of abuse of power and obstruction of Congress. Heady US markets took little notice of the developments, largely because it is unlikely that the President will be removed from office when the trial moves to the Republican-controlled Senate.

The Pound has lost all of its post-election gains over the week as markets absorbed the fact that despite Boris Johnson’s majority in the Commons, there is still a sizeable risk of a disorderly Brexit, particularly as Johnson announced plans to set a Brexit deadline of December 2020, with or without a trade deal.

The Numbers

GBP Performance to 19/12/19
1 Week
Absolute Level
Equity GBP Total Return (MSCI)





Europe (MSCI Europe)








Japan (MSCI Japan)




Emerging Markets (MSCI Emerging)




Fixed Income GBP Total Return

UK Government (Barclays Sterling Gilts Index)




Investment Grade Hedged (Barclays Global Aggregate Corporate Bond Index)




High Yield Bonds Hedged (Barclays Global High Yield Index)




GBP Performance to 19/12/19
1 Week
Absolute Level
Currency Moves













Commodities GBP Return

Gold (in £)




Oil (in $)




Source: Bloomberg, data as at 19/12/19

The Nuance

As 2019 draws to a close, it’s worth looking back over what has been a year full of surprises. This time, last year, markets were in the doldrums, but we were about to head into the largest January stock market upswing for 30 years. That first quarter set the tone for what would be a muddled year for market news; with a dovish shift from the Fed combining with mounting concerns over global growth levels leading to an environment where global equities were rising alongside government bonds.

By the time we had reached the summer months, sentiment was weakened as Trump’s trade war with China began to heat up, and markets digested the fact that the dispute would start to eat into global growth. Poor economic data and the inversion of the US yield curve then reignited fears that the ageing bull market would finally come to an end, and we would enter a recession. In July, the Fed stepped in, cutting rates for the first time since 2008. A month later, the ECB followed suit, cutting rates into deeper negative territory and embarking on a fresh round of quantitative easing.

And now here we are, in a year dogged by Brexit, trade wars and slowing global growth, in the midst of another record-breaking market rally. The improvement in sentiment is due to an uptick in global PMI numbers, an apparent thawing of tensions between the world’s two major superpowers and the fact that Central Bank intervention seems to have done enough to keep the world economy growing at an acceptable pace as we head into a new decade. For the Manager, this year has shown just how important it is to invest in businesses that you believe in rather than try to second guess the market’s movements. This would have been a very easy year in which to be caught out by making big macroeconomic calls, as indeed we saw with a number of major bond funds in the middle of the year. As we enter a new decade, the Manager remains cautious on global growth but confident in the ability of good companies to power returns for investors.

Quote of the week

“Well, the USDA took Wakanda off the list. Guess we’re in a trade war with them too.”

Francis Tseng, Software Engineer

Film-goers will recognise the name Wakanda as the fictional secret kingdom from sci-fi blockbuster Black Panther, where mythical substance vibranium imbues the nation with scientific superpowers. It also happened to feature on the United States Department of Agriculture’s (USDA) online list of nations that have free trade agreements with the United States this week. Tseng, a New-York based software engineer was the first to notice its appearance, calling it out on Twitter. The USDA hastily removed the mythical country from the list, later admitting that it was a mistake.

Source: Sanlam Private Wealth

Seven Insurance Brokers Logo
Seven Insurance Brokers Logo

For more information on VAM Funds, please contact us at sales@vam-funds.com or on +230 465 6860

Issued by Seven Insurance Brokers LLC

Sanlam Private Wealth is a trading name of Sanlam Private Investments (UK) Ltd.

Past performance is not a reliable indicator of future returns, investing involves risk and the value of investments, and the income from them, may fall as well as rise and are not guaranteed. Investors may not get back the original amount invested.

The information and opinion contained in this market view should not be treated as a forecast, research or advice to buy or sell any particular investment or to adopt any investment strategy. Any views expressed are based on information received from a variety of sources which we believe to be reliable, but are not guaranteed as to accuracy or completeness by Sanlam. Any expressions of opinion are subject to change without notice.

Disclaimer: VAM Cautious, Balanced and Growth Funds are compartments of VAM Managed Funds (Lux).
This document is intended for use by professional financial advisers only. The distribution of VAM Funds and the offering of the shares may be restricted in certain jurisdictions. Private investors should contact their financial adviser for more details on any of the products featured. It is the responsibility of any person in possession of this document to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdictions. Prospective applicants for shares should inform themselves as to the legal requirements and consequences of applying for, holding and disposing of shares and any applicable exchange control regulations and taxes in the countries of their respective citizenship, residence or domicile.

Licensed and Regulated by the United Arab Emirates Insurance Authority registration number 248.
Dubai Economic Department Commercial License number 730646.

© 2020 Seven Insurance Brokers. All rights reserved.