March was another volatile month as investors grappled with the uncertainty in US trade policy and mixed economic data. US equities (-8%) and growth stocks suffered amid chatter about a possible US recession, while value, Europe (-3%) and EM (-2%) stocks proved comparatively resilient and gold hit $3,000/oz for the first time, underscoring the benefits of diversification across assets and markets.
UK
- In the UK, FTSE 100 (-2%) & FTSE 250 (-4%) finished the month lower on account of domestic growth fears, with the economy slowing month-on-month by 0.1%.
- 20 March: the Bank of England (BoE) maintained interest rates at 4.5%, following an 8-1 vote by its Monetary Policy Committee (MPC).
- 26 March: Rachel Reeves presented the Spring Budget Statement. Headlines included defence spending, public service reform, and the OBR halving its 2025 growth forecast to 1%.
- The low relative tariff rate (10%) and services accounting for two thirds of exports (not subject to tariffs services), leaves the UK well placed versus the rest of the world.
- The average price of a home was unchanged at £271,316 in March, compared with February’s 0.4% monthly rise, according to Nationwide building society.
Global
- Across the pond, US trade policy hampered market returns. The S&P 500 (-6% in USD) continued its downward trajectory, led by significant losses in the technology sector.
- The VIX, an index known as Wall Streets ‘fear gauge’ which measures expectations about future volatility, hit 28 during the month, the highest since August 2024.
- 6 March: the European Central Bank (ECB) lowered its deposit facility rate by 25 basis points to 2.5%, marking the sixth consecutive cut since June 2024.
- 18 March: The German parliament agreed major infrastructure and defence spending of €500bn and to relax fiscal restrictions.
- 19 March: The Fed decided to maintain the target range of 4.25%-4.50% given resilient economic data.
Fixed interest
- U.S. Treasury Curve: With heightened volatility across investment markets in March, investor demand for U.S. government bonds increased.
- Treasury yields for 2y & 5y Treasuries fell by 11bps and 7bps. The 10y yield was unchanged, whilst the 30-year yield was 8bps higher, reflecting investors’ cautious approach in an uncertain market.
Other
- Gold,a safe haven asset, has continued to rise and is a sign that investors are in a ‘risk-off mood’. It rose 19% in the first quarter to reach a new all-time high of $3,125.
- March saw Bitcoin lose nearly a quarter (-19.1%) of its value since the Trump Administration flagged the introduction of tariffs, while Ethereum, the second-most popular crypto coin, was down 44%.
Would you like a second opinion on your investment performance? Get in touch by calling 03300 564 446, or use our contact form.
This article is for general information purposes only and does not constitute financial advice or a personal recommendation. Past performance is not a reliable indicator of future results. Investments can rise or fall in value, and you may receive less than you originally invested. Tax treatment depends on individual circumstances and may change in the future.
