So we are fresh into the new investment drawdown world and the worst possible scenario is playing out on global stock markets. An immediate decline and the need to take an income will mean those who haven’t structured their portfolios correctly are going to run out of funds earlier than planned.
In this blog we are going to have a look at what the last 3 months has done to the various fund sectors in an attempt to highlight to those who aren’t already invested, the benefits of diversifying a portfolio.
Lets start with the sectors which is arguably responsible for the global sell off. The Asian Pacific which includes China has seen its bubble pop. The Chinese stock market which went on an unbelievable run in the first half of 2015 has fallen of a cliff. Fear that China is slowing down has ramifications throughout the rest of the world which supplies it. The mining sector suddenly doesn’t need to produce as many materials and has been one of the biggest casualties. In late August, the Shanghai main share index lost 8.4% and 7% on the 24th and 25th respectively.
UK Gilt 4.3%
Europe excluding the UK (3.9%)
UK All Companies (4.9%)
The UK market is broken down into a number of sub-sectors. Although the UK All Companies sector averaged a decline of -4.9% the UK Smaller Companies only declined by -0.2%. The Smaller companies sector has doubled the growth of the All Share Sector over the last 5 years which suggests some resilience to resent volatile conditions.