May’s investment market commentary

The COVID-19 narrative continued throughout May with the focus of most market commentators on the efficacy of the vaccine rollout and the global economic reopening, which Tom Caddick’s update explains.
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Published 3 June
3 mins

The COVID-19 narrative continued throughout May, as it is likely to for some time yet, with the focus of most market commentators, and indeed markets, on the efficacy of the vaccine rollout and the global economic reopening.

The fact that global equity markets rose by 1.1% over the month of May belies the truth of what was a relatively volatile period for riskier assets as the topic of inflation moved from meaningful discussion to reality. Higher than expected inflation out of the US, reported mid-month, saw the S&P500 swing down as much as 4%, despite eventually posting a modest gain month-on-month. Concerns over inflation rippled across markets, in particular those areas that are closest to mass vaccination. The key challenges remain: how transient is inflation likely to be and how accommodating will central banks remain with their economies running hot?

While inflation was the headline grabber for equity markets, it was the continuation of leadership from value oriented sectors that really provided the engine of returns. It was the more cyclically sensitive areas that saw the greatest gains, with energy (+5.8%), financials (+5.2%) and materials (+3.8%) all worthy of note.

But sticking with the inflation theme, it is no surprise to report that commodities were the stand out asset class on the month, up 2.1% in May based on a broad basket of assets. Gold was up 7.7%, which is an asset that is considered to provide some inflation protection, and oil up 4.5% for the month and continuing its strong appreciation. This is an indication of an uptick in economic activity.

Turning to fixed income markets, the main surprise was just how sanguine the asset class remained with such an inflationary story leading the charge. There was a slight steepening of the yield curve further out (a fall in price being the other side of this move) suggesting slightly higher rate expectations, but it was not meaningful and returns were broadly flat to slightly stronger on the month for both sovereign and credit markets.

Finally to currencies and of particular note was the continued softening of USD, following on from April. This was particularly apparent against Sterling with the  US Dollar down 2.7%, although a shift of -1.7% against the Euro on the month is also worthy of a mention as this now wipes out any gains in the currency for the year.

FTSE 1006969.817022.61
DJ Ind. Average33874.8534529.45
S&P Composite4181.174204.11
Nasdaq 10013860.7613686.51
£ Base Rate0.10.1
Brent Crude66.7669.32

This month’s values quoted as at 31/05/2021. The above values are sourced from Bloomberg and are quoted in the relevant currency.

Clients of Nedbank Private Wealth can get in touch with their private bankers directly to understand how their portfolios are responding to market events or call +44 (0)1624 645000 and speak to our client services team.


If you would like to find out more about how we help manage clients’ investments, please also contact us on the number above. Or you can get in touch using the links to the forms towards the end of this page.

Investments can go down, as well as up, to the extent that you might get back less than the total you originally invested. Exchange rates also impact the value of your investments. Past performance is no guide to future returns. Any individual investment or security mentioned here may not be suitable, and is included for information only and is not a recommendation. You should always seek professional advice before making any investment decisions.

about the author

Tom Caddick

Tom Caddick

Tom joined Nedbank Private Wealth as its chief investment officer in March 2021. Prior to joining, Tom was at Santander Asset Management in London for nine years, where he was, most recently, chief investment officer for the UK business and previously global head of the multi asset division. He has over 20 years’ investment experience, including several years as head of multi manager and fund selection at LV Asset Management.


Tom’s responsibilities include heading the London-based investment team, and chairing both the International Strategy Committee and the International Investment Committee. Tom is also part of the international investment team for Nedgroup Investments, a sister company of Nedbank Private Wealth.

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