We recognise that these are challenging times for everyone but hope that as we ease out of lockdown you are keeping well and looking forward to spending more time with family and friends.

So looking at the markets now, it has been very pleasing to see that since the March lows, many equity markets have recovered substantially, however, they remain volatile. Equity markets continue to balance the damage inflicted by the actions taken to halt the spread of COVID-19, with the measures implemented to counter the economic impact and protect the loss of jobs.

Recent reports of progress on a vaccine from Moderna in the US and AstraZeneca in Oxford have led to a sense of optimism. Even though the efficacy of these vaccines is still being tested and could still be many months away, facilities are already being prepared in advance for mass production on a huge scale. In the UK, the lockdown measures show signs of success, with fewer new cases and deaths, and restrictions slowly lifting. In many parts of Europe and the US, lockdowns are being eased, and the reopening of parts of the economy on the back of better numbers is positive. 

However, despite this, the global economy has incurred significant damage. We may not get a clear measure of the economic situation until after the pandemic is over. Given the recovery seen in many equity markets, it is clear that investors have preferred to look forward through the crisis as opposed to focussing on the present economic impact. Some industries may see a rapid recovery as conditions begin to normalise; however others, particularly the hospitality and tourism sectors, will take more time to recover.

Nervous markets may prevail and we would encourage investors to try to look through the day-to-day noise. News of advances on vaccines and the possible stimulus measures have generated a degree of optimism over the past month. However, for example, disagreement between EU member states, rising tensions between the US and China and somewhat unreliable economic data have weighed on investors' enthusiasm and dented the market's positive sentiment.

We continue to advocate careful selectivity and taking a medium to long-term approach to investment.

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