22 May 2020
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Seven Insurance Brokers Market Update
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VAM Funds

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

The Noise

UK markets responded favourably on Monday to news that Oxford University’s vaccine trial was producing promising results. Drug-maker AstraZeneca said on Thursday that it had secured orders for at least 400 million doses of an as-yet-unproven COVID-19 vaccine and would begin delivering them in September.

The Bank of England has publicly disclosed that it is considering the introduction of negative interest rates for the first time in its 324-year history to help stimulate an economic recovery. Andrew Bailey, the Bank’s governor, stressed however, that the Bank needed time to consider the implications of doing so before action would be taken.

The Italian Prime Minister said that the country is taking a “calculated risk” as it moves to further ease its Coronavirus lockdown measures. Mr Conte announced that shops and restaurants are due to reopen from 18th May providing social distancing is enforced. Swimming pools and sports centres will reopen on 25th May.

The Numbers

GBP Performance to 21/05/20
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 21/05/20
1 Week
Absolute Level
Currency Moves













Commodities GBP Return

Gold (in £)




Oil (in $)




Source: Bloomberg, data as at 21/05/2020

The Nuance

As snippets of vaccine-related news continue to sway markets, this demonstrates the significant uncertainty investors are facing as to the possibility and timing of a vaccine being commercially available. Economies continue to take tentative steps towards reopening businesses, but investors must consider the potential for a second wave of infections. Whilst the path ahead remains unclear, the Manager focuses on investing in companies with excellent foundations which it is confident can perform well even against a tougher market backdrop before a full solution is reached.

Economies continue attempts at restarting, with China leading the way and European economies following. The recent steps backwards in China to cope with a second outbreak show the challenges that policy makers face. Over the course of the week, the Manager has made some minor changes to its portfolios as the market presents opportunities. The Manager took profits from its late-March opportunistic purchase of the technology consulting company Accenture, and reinvested in the Switzerland-based pharmaceutical company, Novartis. While not directly involved in searching for a vaccine, it has a strong market position with innovative medical technologies which the market, in its narrow focus on COVID-19, is overlooking

Quote of the week

“Life is a lot more fun when you don’t care how weird you are.”

Lennon Thomas, Dungeons and Dragons fan.

For those of you unaware, Dungeons and Dragons is a fantasy role-playing game and Mr Thomas, who lives near Cardiff in Wales, is certainly a fan. In fact, he’s such a good fan that his commitment to the game led directly to armed police being called on him. Perhaps that’s not unsurprising when you consider that the 20-year old decided to go out for some exercise dressed in a full medieval knight’s outfit, carrying a three-foot long sword. Apparently he had worn it out for his walk around the lake “to get used to the weight”. After armed police confronted him at gunpoint and determined that he posed no threat, Mr Thomas said “perhaps it was a little stupid of me to bring the sword as from a distance it does look realistic.”

Source: Sanlam Private Wealth

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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.

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