Fiducia Portfolio Update and Market Outlook – Feb 2022

Market Update

Since the end of last year and into the beginning of 2022, we have witnessed a large rotation of funds out of growth orientated tech, small and mid-cap stocks, to value orientated large cap stocks, primarily due to the anticipated rate hikes by the different Central Banks, which caused a slight correction in markets.

Despite this sell off, we felt it was a healthy correction from the rather extreme heights that markets had reached, and we still held a cautiously optimistic outlook for the remainder of the year. In many areas of the world, particularly the UK and US, there has been a move from a ‘just in time’ production process, to a ‘just in case’ process, and whereas over the previous 40 years capital spending in the developed world has been on a downward trend, partly because people have been outsourcing production to the emerging markets, this now looks to be changing, with a capital spending revival now being seen in areas such as infrastructure, defence (quite t