Acumen Portfolio Performance YTD 2021

Commentary on Portfolio Performance – February 2021

Acumen & Trust repeated the clean sweep of positive performances for the second consecutive month of 2021. The drop in infections and the rapid vaccination rollout continued to drive equity markets higher in February. The UK and US could achieve a large-scale reopening by mid-year. Economic momentum and the expected approval of President Biden’s fiscal programme boosted the US recovery with positive spill-over effects for the global economy. The IMF upped its growth forecast for the world economy in 2021 from 5.2% to 5.5% and is forecasting further strong growth of 4.2% in 2022. Core government bond yields are rising as markets price in higher future growth and inflation expectations.

The energy and financial services sectors outperformed thanks to expectations of a rapid return to a post-pandemic normality. The risk of a return of inflation that could materialise in mid-2021 is fuelling a trend of rising yields, particularly at the long end of the curve and this is impacting bond valuations. Demand for oil which is now at pre-Covid prices and copper, a key industrial metal, has been strong. Gold has fallen back as some investors preferred to capitalise on rising government bond yields.