Original thinking | 6 June 2025

Monthly news and views covering May

Chris Robinson &

Ian Rees

Monthly market news and views from the Managed Portfolio Service team.

For information purposes only. Any views and opinions expressed here are those of the author at the time of writing and can change; they may not represent the views of Premier Miton and should not be taken as statements of fact, nor should they be relied upon for making investment decisions.

Investing involves risk. The value of an investment can go down as well as up which means that you could get back less than you originally invested when you come to sell your investment. The value of your investment might not keep up with any rise in the cost of living.

Premier Miton is unable to provide investment, tax or financial planning advice. We recommend that you discuss any investment decisions with a financial adviser.

For further information on the risks of investment and glossary terms please refer to the end of the document.

In Brief

Tariff negotiations begin and the UK/US agree initial deal.
Fixed income markets remain concerned about government borrowing levels.
Economic data and earnings signal things aren’t bad at all.

The month of May

“Sell in May and go away” is an old saying which implies that if an investor sells company shares (equities) at the beginning of May and buys fixed income (bonds), they will benefit as returns for equities will be less than that of fixed income from May to October. This was based on data from the 1950’s, however data since the 1990’s hasn’t quite reflected this trend.

If we look to this month of May, the adage definitely didn’t apply. Global equities rose significantly during the month with Government Bonds falling marginally in value. It was the agreement between the US & China to suspend Tariffs for 90-days which was the initial boost. This was followed by Trump’s Petrol-dollar fueled investment pledges in the Gulf states – resulting in him accepting a new air force one.

Closer to home, the UK was the first to agree a trade deal with the US, but few other nations have managed the task. Europe, Japan and crucially China remain in negotiations – a tension point we’ve seen Trump yoyo on.

A small but significant deal was also done between Europe and the UK. Agreeing to a “reset” of relations with terms on fishing, defence, food produce and education.

What this meant for equity markets for the month was more relief than anything. The FTSE AIM market, the UK’s alternative investment market with very small companies, rallied +8.4%, comparable in performance terms to one of the best performing markets, the Nasdaq a US technology index, which rose +8.7%.

Across developed markets it was a consistent return, the FTSE Europe ex UK Index rose +3.9%, the FTSE All-Share Index rose +4.1% and the S&P 500 Index rose +5.4% (Europe, UK & US).

Whilst equities rallied across Europe, the UK and the US, corporate bond yields in these countries rose and bond prices fell as uncertainty around government spending continued to be in focus. Trump’s “beautiful bill” as he described it led to a questioning of fiscal discipline and ultimately higher borrowing for the US government. If the government wants to borrow to spend it will need to provide a higher yield to lenders. The team are watching US government spending plans closely and any impact it may have on the price of US government Bonds.

If there was ever an asset that provides an indication that positivity has returned its Bitcoin, rising from $94,000 a coin and touching over $112,000 at its peak in the month. It did subsequently fall in value but does seem to rise in value in positive market environments.

Moving away from the political narrative, economic data maintained the theme of normalisation. Economic growth in the UK, Europe and US is stable with no significant shocks.

European inflation continues to fall, increasing the likelihood of interest rate cuts by the European Central Bank.

UK retail sales were the standout of the month, significantly ahead of expectations – boosted by the weather (long may it continue).

Meanwhile US inflation rates, specifically producer prices, did show signs that companies were taking a hit on profit margins (the percentage by which a company’s revenue exceeds its costs of operation) due to tariff pressures.

One thing we can note from the month was the positive end of the company earnings season. Nvidia, the biggest chip maker in the world, beat expectations once again and once again, and this pushed the value of the US equity market higher, from a low base.

So far this year there remains a significant difference in returns of the US and Chinese equity market and the rest of the World. The S&P 500 Index and the FTSE China A50 Index are both down (-6.0% & -5.7%). When we compare this to the FTSE Europe ex UK Index (+13.5%) and FTSE All-Share Index (+8.6%) there remains a notable winner and confidence that government spending and lower interest rates are likely to support growth.

It’s difficult to see a change to this narrative anytime soon but as June brings the central bank interest rate decisions and inflation expectations, expect a few fireworks.

No doubt Trump will continue to review trade and spending plans to add to the fun!

Key positioning for the portfolios

The last changes were on the 10^th April, which happened to coincide nicely with the low point of the equity stockmarkets so far this year.
We have maintained our current asset allocation weightings in the portfolios after adding some more to our holdings in European equities and took some profits by selling some of our UK and Japan investments.
Within our fixed income investments, we still prefer higher quality corporate bonds and UK government bonds.

So far this year there continues to be a difference between the US & Chinese equity markets and the rest of the World - Chris Robinson

Glossary

Bonds (or fixed income)

Types of investments that allow investors to loan money to governments and companies, usually in return for a regular fixed level of interest until the bond’s maturity date, plus the return of the original value of the bond at the maturity date. The price of bonds will vary, and the investment terms of bonds will also vary.

Corporate bonds

Issued by companies and similar to a loan in nature, usually paying a fixed rate of interest.

Developed market

A country that is more developed economically (as opposed to an emerging market – see below).

Emerging markets

Countries with less developed financial markets and which are generally considered riskier than investing in developed markets.

FTSE All-Share Index

An index that represents the performance of all eligible companies listed on the London Stock Exchange's (LSE) main market, which pass screening for size and liquidity.

FTSE China A50 Index

An index consisting of the largest Chinese companies.

FTSE Europe ex UK Index

An index that provides coverage of Developed and Emerging markets in Europe, excluding the UK.

Government bonds

A type of bond, issued by a government. They pay out a regular fixed amount of interest until the bond’s maturity date, when the issue value of the bond should also be repaid. In the UK they are called gilts and in the US they are referred to as treasuries.

S&P 500 Index

A stock market index consisting of the 500 largest US public companies.

Yield

The dividend per share divided by the stock's or fund’s price per share and expressed as a percentage. The historic yield is the dividend income distributed during the past year and expressed as a percentage of the share price on a particular day.

Risks

Typically, there is less risk of losing money over the long-term (which we define as over 5 years) from an investment that is considered low risk, although potential returns may also be lower. Investments considered higher risk typically offer greater opportunities for better long-term returns, though the risk of losing money is also likely to be higher.

The performance information presented in this document relates to the past. Past performance is not a reliable indicator of future returns.

Forecasts are not reliable indicators of future returns.

Some of the main specific risks that apply to the funds that these portfolios invest in are summarised here. If the funds that are held in the portfolios change, the types of investment risk that the portfolios are exposed to will also change.

Fixed income investments, such as bonds, can be higher risk or lower risk depending on the financial strength of the issuer of the bond, where the bond ranks in the issuer’s structure or the length of time until the bond matures. It is possible that the income due or the repayment value will not be met. They can be particularly affected by changes in central bank interest rates and by inflation.

Equities (company shares) can experience high levels of price fluctuation. Smaller company shares can be riskier than the largest companies, companies in less developed countries (emerging markets) can be risker than those in developed countries and funds focused on a particular country or region can be riskier than funds that are more geographically diverse. These risks can result in bigger movements in the value of the fund. Equities can be affected by changes in central bank interest rates and by inflation.

Derivatives may be used within funds for different reasons, usually to reduce risk, which can be called “hedging”. This can limit gains in certain circumstances as well. Derivatives can also be used to generate income or to increase the risk being taken, which can have positive or negative outcomes. The derivatives used can be options or futures which are types of contracts that are dealt on an exchange or negotiated with a third party. More complex derivatives may also be used. Derivatives can also introduce leverage to a fund, which is similar to borrowing money to invest.

Funds may have holdings in investments such as commodities (raw materials), infrastructure and property as well as other areas such as specialist lending and renewable energy. These investments will be indirect, which means accessing these assets by investing in companies, other funds or similar investment vehicles. These investments can also increase risk and experience sharp price movements. Funds focused on specific sectors or industries, such as property or infrastructure, may carry a higher level of risk and can experience bigger movements in value. Certain investments can be impacted by decisions made by third parties, such as governments or regulators.

There are many other factors that can influence the value of a fund. These include currency movements, changes in the law, regulations or tax, operational systems or third-party failures, or financial market conditions that make it difficult to buy or sell investments for the fund.

*Funds that are managed to maintain a specific risk profile, or that invest in other funds that themselves are managed to maintain a specific risk profile, may have their potential growth or income constrained as a result.

*Applicable for the Premier Miton Blend Portfolios only.

Important Information

This is a marketing communication.

Whilst every effort has been made to ensure the accuracy of the information provided, we regret that we cannot accept responsibility for any omissions or errors.

Reference to any investment should not be considered advice or an investment recommendation.

All data is sourced to Premier Miton unless otherwise stated.

Source for performance data: FE Analytics.

All performance figures have been given in £ sterling.

Source: FTSE International Limited (“FTSE”) © FTSE 2025. “FTSE®” is a trademark of the London Stock Exchange Group companies and is used by FTSE under licence. All rights in the FTSE indices and / or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and / or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Copyright © 2025, S&P Dow Jones Indices LLC. Reproduction of S&P Indices in any form is prohibited except with the prior written permission of S&P. S&P does not guarantee the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions, regardless of the cause or for the results obtained from the use of such information. S&P DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. In no event shall S&P be liable for any direct, indirect, special or consequential damages, costs, expenses, legal fees, or losses (including lost income or lost profit and opportunity costs) in connection with subscriber’s or others’ use of S&P Indices.

This document and all of the information contained in it, including without limitation all text, data, graphs, charts, images (collectively, the “Information”) is the property of Premier Fund Managers Limited and/or Premier Portfolio Managers Limited (“Premier Miton”) or any third party involved in providing or compiling any Information (collectively, the “Data Providers”) and is provided for informational purposes only. The Information may not be modified, reverse-engineered, manipulated, reproduced or distributed in whole or in part without prior written permission from Premier Miton. All rights in the Information are reserved by Premier Miton and/or the Data Providers.

Marketing communication issued by Premier Miton Investors. Premier Portfolio Managers Limited is registered in England no. 01235867. Premier Fund Managers Limited is registered in England no. 02274227. Both companies are authorised and regulated by the Financial Conduct Authority and are members of the ‘Premier Miton Investors’ marketing group and subsidiaries of Premier Miton Group plc (registered in England no. 06306664). Registered office: Eastgate Court, High Street, Guildford, Surrey GU1 3DE.

016592/060625

Legal

Have a question?

©Premier Miton Investors. 2025. Issued by Premier Miton Investors. Premier Portfolio Managers Limited is registered in England no. 01235867. Premier Fund Managers Limited is registered in England no. 02274227. Both companies are authorised and regulated by the Financial Conduct Authority and are members of the ‘Premier Miton Investors’ marketing group and subsidiaries of Premier Miton Group plc (registered in England no. 06306664). Registered office: Eastgate Court, High Street, Guildford, Surrey GU1 3DE.

Monthly news and views covering May

The month of May

Key positioning for the portfolios

Legal

Other links

Follow us

Have a question?