Global equity markets fell by 0.8% (in local currency terms) in February, while Eurozone markets rose by 3.4% over the month.
Eurozone equities outperformed global markets in February, with European stocks rallying on hopes that increased defence spending and an end to the war in Ukraine could stimulate growth.
In contrast, US markets experienced a notable downturn due to concerns over President Trump’s new tariffs on imports, particularly from Canada and Mexico, creating uncertainty and heightened inflation concerns. Fears that the new tariffs could start a trade war between the US and its near neighbours contributed to the market decline.
The Eurozone annual inflation rate fell slightly to 2.4% in February, primarily driven by lower energy prices and a modest decline in service costs. ECB policymakers remain cautious with the pace and magnitude of further rate cuts, with ECB President Lagarde emphasizing that incoming data will continue to inform future rate cuts.
Annuity prices experienced a rise in February as bond yields fell. All annuity rates are 5-year guarantee and single life.
The funding level of our sample DB scheme fell to 108%, with its liabilities rising by more than its assets (calculated using a Funding Standard proxy) over February. Our High Risk, Medium Risk DC strategies posted negative returns, while our Pension Purchase DC strategy experienced an increase over the month.
