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April 2021
Economies have shown a mixed performance throughout April. In the UK, we saw the first easing of lockdown restrictions and a glimpse back to some sort of normality, and other European countries following with their own easing of measures. Yet in countries such as Brazil and India, record numbers of both coronavirus cases and deaths have been reported. Government and Central Banks have continued to provide ongoing support, as necessary.

Of the developed equity markets, all achieved positive returns for the month, with the exception of Japan. The gold price also increased, whilst both corporate and governments bonds showed very little movement overall.

Market Round Up

Performance of major equity marketsApril 2021Year to date
UK (FTSE 100) 4.1%9.3%
US (S&P 500)5.0%10.4%
Europe (MSCI Europe Ex UK)2.1%10.7%
Asia (MSCI Asia Pac Ex Japan)2.1%6.2%
Japan (Nikkei 225)-0.5%-1.5%
China (SSE Composite)1.1%-1.0%

Source: Morningstar Direct

UK
In the UK, the positive steps in the vaccine roll out and the easing of lockdown restrictions has been leading optimism. The FTSE 250 index closed above 22,000 for the first time ever and the FTSE 100 index rose above 7,000 for the first time in 13 months. The latter pulled back slightly over the second half of the month, due to concern with potential new coronavirus variants and suggestions that the US will cut nicotine levels in cigarettes so that they are no longer addictive.

House price growth has continued into 2021. It was 8.6% for the year to February, and this is the fastest rate since 2014. As a result, UK mortgage commitments have continued to increase, and new commitments during Q4 2020 were at the highest level since Q3 2007. Growth is expected to continue, in part due to the Chancellor extending the stamp duty holiday to 30 June 2021.

The UK economy grew by an estimated 1.3% in Q4 2020 according to the Office for National Statistics (ONS), which also highlighted that gross domestic product was 7.3% below its pre-pandemic level. It is expected that the growth will continue throughout 2021 as lockdown measures are expected to ease further and the vaccine roll out continues. Unemployment fell slightly to 4.9%.

US
Joe Biden has continued to pledge money to transform the US economy and support the post coronavirus recovery. As well as the $1.9 trillion economic rescue plan, there is a $2.25 trillion infrastructure plan and $1 trillion in spending with $800 billion in tax cuts and credits for lower- and middle-income families. The spending proposals, and the increase in the vaccination roll out has seen the S&P 500 and Dow Jones indices rise to new all-time highs, whilst the number of unemployed in the US dropped and the 4-week moving average was the lowest since before the pandemic.

The level of new money and increases in energy prices have raised concerns about inflation. The CPI for March 2021 was 0.6% and 2.6% over the last 12 months to March. The Federal Reserve have maintained interest rates near zero and continued their asset purchases, however it is wondered how long this will continue, given the potential inflationary pressures.

Europe
European markets have shown mixed performance as there have been rises in coronavirus infections and lockdown restrictions in some areas, coupled with supply issues of the vaccine. Supplies of the vaccine have improved and restrictions are beginning to ease in some areas. Discussions of a return to non-essential travel have also helped to improve the outlook of the Eurozone.

The European Central Bank has kept interest rates, asset-purchase programmes and bank loans at the same levels. The asset purchase programme is expected to continue until at least March 2022 and highlights the significant level of support the Eurozone requires to recover from the pandemic.

Conclusion
April has shown us that coronavirus remains a risk. Whilst developed economies are progressing with their vaccine programmes and beginning to ease restrictions, parts of Asia and Latin America are facing further waves of the virus. These relentless waves could lead to new infectious strains that existing vaccines might be less effective against.

The levels of government and central bank stimulus, plus the easing of restrictions has given investors reason for optimism and this is expected to continue throughout 2021.

Performance of major equity markets over 1 year (01 May 2020 – 30 Apr 2021):

Performance of major equity markets over 1 year1 May 2020 to
30th April 2021
UK (FTSE 100) 22.2%
US (S&P 500)33.0%
Europe (MSCI Europe Ex UK)34.5%
Asia (MSCI Asia Pac Ex Japan)41.6%
Japan (Nikkei 225)29.2%
China (SSE Composite)19.6%

Source: Morningstar Direct

Risk Warnings
The following is a summary only of some key items in the Prospectus. Capital is at risk. Investors in Protected Cell Company (PCC) must have the financial expertise and willingness to accept the risks inherent in this investment. Past performance is not a reliable indicator of current or future performance and should not be the sole factor considered when selecting funds. The Master funds will be exposed to stock markets. Stock market prices can move irrationally and be affected unpredictably by diverse factors, including political and economic events. It should be appreciated that the value of Shares is not guaranteed and may go down as well as up and that investors may not receive, on redemption of their Shares, the amount that they originally invested. Investment in the Company should only be undertaken as part of a diversified investment portfolio. Investment in the Shares should be viewed as a medium to long term investment. Shares may not be redeemed otherwise than on any Dealing Day. There will not be any secondary market in the shares of the Company.

Regulatory Information
This material is for distribution to professional clients only and should not be distributed to or relied upon by any other persons. The Cells referred to are a cell of Marlborough International Fund PCC Limited (the ‘Company’), a protected cell company incorporated in Guernsey and authorised as a Class B Collective Investment Scheme under the terms of the Protection of Investors (Bailiwick of Guernsey) law, 1987, as amended. Investment may only be made on the basis of the current Prospectus, this can be found on the website www.marlboroughinternational.gg. Marlborough International Management Limited is incorporated in Guernsey. Registration No. 27895. Regulated by the Guernsey Financial Services Commission. It is not protected by any investor compensation scheme. Licensed under The Protection of Investors (Bailiwick of Guernsey) Law 1987. Guernsey Office: Town Mills South, La Rue du Pre, St Peter Port, Guernsey GY1 3HZ. Tel: +44(0)1204 589336.