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Ark Review of the Month

August 2023

Global Markets


In August, market volatility increased as global equity markets underperformed. Among the major developed market indices, the US S&P 500 fell by 1.6%, the MSCI Europe ex-UK Index fell by 2.2%, and the UK FTSE All-Share Index fell by 2.5%. Emerging markets declined more than developed markets, with the MSCI Emerging Markets Index down 6.1%, driven by weak macroeconomic data from China due to the continued pressure on the Chinese real estate market.


The Bloomberg Barclays Global Aggregate Index, the world's leading bond index, dropped by 1.4% in August as sovereign bond yields rose. Prices of US Treasuries and US Gilts both fell by 0.5%. Global investment-grade corporate bond prices also declined by 1.0%.

As of 31 August 2023:

UK 10 Year Gilt Yield 4.36%
US 10 Year Treasury Yield 4.11%
Germany 10 Year Bund Yield 2.47%

UK Market

UK GDP grew by 0.5% in June compared to May. Q2 GDP was also 0.2% higher than the first quarter, better than Bank of England's previous forecasts. The growth was partly due to the fact that the UK had its hottest June on record, with good weather boosting the hospitality, tourism, retail and construction sectors. The Office for National Statistics' (ONS) monthly business survey shows that, businesses in these sectors reported that the warm weather was a positive factor for their output growth.


Inflation in the UK, as measured by the Consumer Price Index (CPI), was 6.8% in July 2023, down from 7.9% in June. This was the second consecutive month of decline in CPI and the lowest CPI since February 2022. Sharp declines in gas and electricity prices were the two largest contributors to the fall.

Ark Insights

Over the past month, a number of investment management institutions, including Goldman Sachs and Schroders, have reassessed their outlook for the US economy and are no longer forecasting a recession in the US. Falling inflation and resilient economic growth have also raised economists' expectations of a soft landing of the global economy. However, the improvement in the economy is not universal. With the US and Japan performing well, the growth momentum in Europe and emerging markets is relatively weaker. Schroders has revised its 2023 US GDP growth forecast to 2.3% from the previous 1.5% but has cut its forecast for China to 4.8% from 6.5%. In the meantime, while inflationary pressures are decreasing, risks have not completely disappeared and central banks may have to maintain restrictive policies beyond 2023. Despite the expected recovery, the global economy still faces a number of challenges.


In this economic environment, risk asset prices have rebounded, with equities and commodities remaining natural hedges against inflation. We continue to believe that investors should maintain diversification and focus on investment quality.


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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