Issue - meetings
Update on Market Outlook and the Fund Investment Managers by the Independent Adviser for Quarter Ending 30th June 2017
Meeting: 21/09/2017 - Pensions Committee (Item 5)
Minutes:
Raymond Haines, Independent Advisor presented a report which detailed the views of the Fund Independent Advisor on markets and the performance of the Fund pension fund managers and the overall performance of the Tower Hamlets Pension Fund.
The Committee was advised that the Market and Economy continued to perform well despite their being a snap election, Brexit and strained relationship in the international political arena. At the end of June the FTSE All Share was up 3.3% (c.5% total return), the S&P IS + 8.2% and gilt yields are below the level at the start of the year. This is attributed to governments creating cash by buying first government bonds then corporate debt. The main beneficiary has been capital markets both bond and equity. Equity markets have raised more on the basis of valuation than economic growth.
The absence of demonstrable value in bonds investors has been continuing to support equity markets. The UK equity market has a number of conflicting influences; sterling’s depreciation is positive for overseas earning and exporters but negative for domestic companies and importers. Brexit uncertainty is negative for most quoted equities and rising inflation and failing economic growth for none.
The market were ‘well behaved’ in Q2 and Q3 and moved up and down by c.1%. Where markets move from here is dependent on exogenous influences such as Brexit negotiations and the USA political leadership, there is enough concerns both external and fundamental to suggest caution. The current strategy in place for the Fund is appropriate.
RESOLVED
That the contents of the report be noted.