Following the reopening of Wall Street on Monday, all funds are now able to be priced. Consequently we are able to process 100% of all new business and servicing requests as normal.
Funds defensively positioned
Prior to events of the 11th September our funds were already defensively positioned. Since the terrorist attack defensive sectors such as oils and pharmaceuticals (where we were already overweight) have outperformed. We believe that defensive sectors will continue to outperform in the current environment of uncertainty and so we will continue to maintain our defensive stance over the short term. Geographically we have also preferred the more defensive markets such as the UK and Europe over the US where we again continue to be underweight.
Support from Central Banks
Central Banks around the world have reacted swiftly to the crisis. Interest rates in the US, UK, Europe and elsewhere around the world have been cut in an effort to maintain confidence in the global financial system. Central Banks are expected to be as accommodative as possible in an attempt to avoid any escalating liquidity worries and further rate cuts are likely.
Important to take a medium to long-term view
A look back at how markets have responded to past tragedies and military action shows that investors who sold their investments prematurely lost money. History shows that markets rebound. Those investors who have made money in the long term have done so by riding out the downturns in equity markets. As we all know, stocks and shares, along with life and pension policies should always be considered as medium to long-term investments.
