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Light and Shadow

Ark Review of the Month

April 2024

Global Markets


US inflation data and strong consumption demand in April raised market concerns that the central banks may not loosen monetary policy as quickly as previously expected. Both stocks and bonds reacted negatively. Among developed market stocks, the US S&P 500 Index fell by 4.1%, while the MSCI Europe ex-UK Index fell by 1.5%. Benefiting from its exposure to the energy and commodity sectors, the UK FTSE All-Share Index achieved a total return of 2.5% in April, making it the best-performing major stock market. MSCI Emerging Markets Index also rose 0.5% in April, driven by their higher commodity exposure and increased investor interest in undervalued Chinese stocks.


As for sovereign bonds, while most developed market bonds experienced price declines in April, eurozone government bonds outperformed US Treasuries and UK Gilts. Bonds from peripheral countries in the eurozone with relatively faster growth also outperformed core country bonds.

As of 30 April 2024:

UK 10 Year Gilt Yield 4.35%
US 10 Year Treasury Yield 4.69%
Germany 10 Year Bund Yield 2.59%

UK Market

Economists still expect the Bank of England to lower its benchmark interest rate, which has been held at 5.25% since August 2023, before the end of this year, according to business news publisher Bloomberg. However, financial markets are anticipating fewer rate cuts this year.


Following a 0.3% rise in UK GDP in January, February 2024 saw a further 0.1% increase compared to January. Two consecutive months of growth make it highly likely that the UK will avoid a "technical recession" this year, although long-term low-speed growth remains a concern. The Office for National Statistics will publish its preliminary GDP estimate for the first quarter on 10 May 2024.

Ark Insights

April highlighted persistent inflation as the prevailing market risk, potentially disrupting the recovery of risk asset prices. Concerns over inflation stickiness have also somewhat offset the attractive valuations of UK equities.


However, in portfolio risk management, it remains crucial to consider both scenarios of recession-induced deflation and persistent inflation. In the event of a potential deflationary shock, medium to long-term high-quality bonds could once again contribute to portfolio returns. On the other hand, the experience of 2022 suggests that alternative investments such as infrastructure and transportation, due to their low correlation with bond and equity markets, have the potential to deliver strong returns if inflation persists.


As always, our Investor Relations team would be more than happy to help you with any queries.


The views expressed in this update are not intended as an offer or solicitation for the purchase or sale of any investment or financial instrument. The views reflect the views of Ark Investment Management at the date of this document and, whilst the opinions stated are honestly held, they are not guaranteed and should not be relied upon and may be subject to change without notice. Investments entail risks. Past performance is not necessarily a guide to future performance. There is no guarantee that you will recover the amount of your original investment. The information contained in this update does not constitute investment advice and should not be used as the basis of any investment decision. Any references to specific securities or indices are included for the purposes of illustration only and should not be construed as a recommendation to either buy or sell these securities or invest in a particular sector. If you are in any doubt, please speak to us or your financial adviser as appropriate.

Issued by Ark Investment Management Ltd which is authorised and regulated by the Financial Conduct Authority. 

© Ark Investment Management Ltd. Registered in England & Wales with the company number 09281759.

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