August proved to be a particularly quiet month for markets, with low levels of volatility across equities and bonds, and little by way of significant news flow. Overall the ‘risk on’ environment of July, post the UK Brexit referendum, broadly continued in August: most equity markets rose modestly higher, with emerging markets leading the way and adding 2.5% in the month.

Within developed markets the US inched 0.1% higher while Asia, Japan, the UK and Europe outperformed in local currency terms, returning 3.0%, 1.3%, 1.5% and 1.0% respectively. In dollar terms, returns were held back by the strength of the greenback, one of the more notable features of the month, which rose by 0.5% against a basket of major currencies. Within fixed income, most government markets produced negative returns whereas credit, especially high-yield bonds, and emerging market debt,
performed well.