The impressive run from US stocks continued in August, easily outpacing all other key developed markets.

A succession of strong economic and corporate data continued to drive US equities higher. Business surveys, consumption data and unemployment figures all pointed to economic expansion in August, however, there were signs of weakness from isolated indicators, such as the US Citi Economic Surprise index.

In sterling terms, our US equity tracker rose 4.95% in the month, with technology stocks continuing to lead the way.

The only other developed market to deliver a positive return for sterling investors in the month was Japanese equities (0.8% from our index tracker), although our active Asian equity fund held in the Dynamic portfolios rose 1.1%.

In the UK, the Bank of England raised interest rates to 0.75%, its second rise since the global financial crisis. The move was well sign-posted and had little effect on the UK yield curve.

Interest rate futures markets suggest no more rate rises are expected until the middle of 2019.

UK equities fell 2.8% in the month, with large cap stocks faring worse (-3.0%). While these returns were disappointing, they were dwarfed by the sell-off in some emerging markets.

Trade tensions and dollar strength continued to dominate investor sentiment. For countries like Turkey, which holds significant amounts of USD denominated debt, the sell-off was severe. Latin American equities also struggled. But at the index level, emerging market stocks fell only 2.0% in the month, showing investors continue to be selective on individual markets.

Within fixed income, sovereign bonds generated small positive returns for investors. It is clear US Treasuries and other key government bond markets continue to act as a safe haven in times of stress.