The raw headline return for the FTSE All-Share Index in April of -0.3% conceals the much more dramatic rollercoaster moves that happened during the month. Early in April the index fell 10% only to recover nearly
all of that loss by the month-end. Market sentiment was notably affected by geopolitical developments and trade-related policy announcements in the US, which triggered sharp movements in both equity and bond markets. These policy shifts were subsequently moderated, contributing to a rebound in risk assets as investor confidence stabilised.
It was also very significant that OPEC announced an increase in oil supply. This led to weakness in the oil price, which in turn fed through to lower share prices for oil producers.
While the index as a whole fell a little during the month, our own portfolio made better progress with a rise of over 1% in net asset value. A considerable part of this was due to our lack of exposure to the two oil majors, BP and Shell, relative to the Index. We also had strong positive contributions from some of our domestically focused companies, such as OSB, which lends almost exclusively against property within the UK, and the UK life assurance companies Phoenix and Legal & General. For these companies, any US tariffs will have almost no impact. In general, the more international the operations, and specifically the more US-focused, the more volatile the share price was during April. Although at face-value the UK equity market ended the month pretty much where it started, the US administration has created considerable uncertainty regarding tariffs,
international trade and, potentially, many other issues in future.
There was also positive news in the UK, with the latest inflation data a little lower than forecast at 2.6% for the year to March. This represented a shift closer to the conditions for interest rates to fall further later in the year, which should help provide a more positive background for the equity market.
Investment risks
The value of your investments and any income from them can go down as well as up and you may not get back the original amount invested. Gearing is used for investment purposes to obtain, increase or reduce exposure to an asset, index or investment.
Issued by Columbia Threadneedle Management Limited and approved for distribution 24/05/2025.
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