For Professional Clients only. Not for distribution to or to be relied upon by Retail Clients.

June 2021

Covid-19, and in particular the Delta variant, continued to dominate news throughout June. Countries across Asia are seeing rising cases and new restrictions, and even countries with high vaccination rates, like the UK and EU, are seeing rising cases that may continue to impact travel during the summer holiday season. Inflation has been another main theme, with speculation of whether it will be short lived or more long term, and when central banks may act and reduce their market stimulus.

Of the major equity markets, the US led the way reaching a new all time high, with Europe and Japan posting modest gains. The UK, Asia and China saw little movement throughout the month. Global treasury bonds and the wider global bond indices gained in the month, whilst UK Gilts and both UK and global corporate bonds showed very little movement overall. The gold price dropped 4.5%.

Market Round Up

Performance of major equity marketsJune 2021Year to date
UK (FTSE 100) 0.4%10.9%
US (S&P 500)5.3%14.0%
Europe (MSCI Europe Ex UK)2.0%16.1%
Asia (MSCI Asia Pac Ex Japan)0.9%8.2%
Japan (Nikkei 225)1.3%-2.6%
China (SSE Composite)0.6%3.6%

Source: Morningstar Direct


In the UK, the last phase of lockdown easing was delayed until at least 19th July due to concerns surrounding the delta variant. Travel plans continue to be disrupted with the changes to the UK’s traffic light system, and countries like Portugal and Spain imposing quarantine requirements on travellers from the UK. Passenger flights from the UK to Hong Kong were also banned.

The Confederation of British Industry (CBI) data showed the fastest pace of growth in industry output for nearly 40 years, with over half of survey respondents reporting increased activity. The CBI also reported that respondents were concerned about supply shortages, and this would impact prices in the months ahead. Along with the increase in oil price and other factors, the CPI for the 12 months to May rose to 2.1%, above the Bank of England’s (BoE) 2% target. The BoE expect that inflation may reach 4% by the end of the year but believe that it is transitionary so will not be long term. The BoE held interest rates at 0.1% and the size of the stimulus programme remained unchanged, which led to falls in both sterling and gilt yields. The FTSE 100 has remained relatively flat for a second month, starting the month just below 7,100 and ending just above this point.

It is expected that growth, overall, will continue throughout 2021, though all eyes will likely be watching to see whether the restrictions will be lifted on 19th July or whether this will be postponed again. Another important factor to watch is how firms will respond as the Government furlough scheme starts to be rolled back.


Joe Biden continues his push on federal government spending when he announced an agreement on $579 billion of infrastructure spending with senators from both political parties that he says will create millions of jobs. There is an optimism that the economic recovery will continue, and it has seen markets pushed to new heights.

Like elsewhere in the world, inflation remains a hot topic. The CPI climbed 0.6% in May, the second largest advance in more than 10 years. The Fed have said that they still believe higher inflation to be temporary, though they have begun discussion about scaling back bond purchases, and they believe there will be two rate hikes in 2023. The news tightened the Treasury yield curve, with the yields on five-, seven- and ten-year Treasury yields increasing, and the yield on 30-year instruments dropping to 2.07% as investors pulled back some inflation bets.


The European Central Bank (ECB) maintained the pace of its bond purchases, continuing for the three months to September, despite increasing forecasts of the Eurozone growth and inflation. The vaccination programme is accelerating across Europe after a slow start however concerns about the delta variant remain, and it is proving more difficult to balance views of the bloc. Countries that rely on tourism are eager to reopen their borders and welcome visitors to boost their economies, however German Chancellor Angela Merkel and French President Emmanuel Macron want to keep travel curbs in place, particularly from areas like the UK where cases of the delta variant are high.


Both inflation and covid-19 continue to be the main topics in June, and this will likely to be the case over the months ahead. Most countries are trying to balance the opening of their economies and avoiding a further outbreak of covid-19. Central banks have started to provide more information on inflation and how long it will last. Investors are watching this carefully and wait for the next economic data.

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

Performance of major equity markets over 1 year1st July 2020 to
30th June 2021
UK (FTSE 100) 18.0%
US (S&P 500)25.9%
Europe (MSCI Europe Ex UK)30.3%
Asia (MSCI Asia Pac Ex Japan)35.3%
Japan (Nikkei 225)14.1%
China (SSE Composite)17.8%

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 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.