| June has been a challenging month with the Brexit referendum being the central focus. Defying many opinion polls and betting markets, the British have voted to leave the European Union by 52% to 48%. The initial sharp response of currency and equity markets suggested that the UK vote was a clear surprise for many observers and participants and a global risk event with long-lasting political and economic consequences. After falling nearly 12% in the two days following the vote, European stocks have retraced more than half that decline. The exception is financials, where valuations remain under pressure. Equities outside Europe have fared better, with the S&P500 only down 0.22% and UK equities up 4.20% in local-currency terms (the pound having dropped to a 30-year low against the dollar). The Nikkei fell by 7%. Altogether, global financial market stress has remained relatively subdued, likely on expectations of easier monetary policy due to slower global growth. Although it will likely take months or even years for the Brexit to show in the real economy, most economists agree that the uncertainty surrounding how the UK will negotiate its departure and the negative impact it will have on growth on the wider European economy will likely weigh on investment and trade in the second half of the year, if not beyond. Brexit comes at a time when global growth is weak and uncertainty over China is high. Although a clear and co-ordinated fiscal and political strategy to safeguard the EU and the euro area is desirable, building a consensus remains difficult. As such, central banks look likely to take additional measures to avoid a more severe downturn.
Please find enclosed the fact sheets of MC Bolero Global Allocation Fund :
Fact sheet – USD – EN
Fact sheet – EUR – FR
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