Fund Management Diary

Transcription

1 Fund Management Diary Meeting held on 20 th November 2018 Macroeconomic Update The downward cycle in bond markets continues. Equity markets also weakened last week, with the US and technology companies faring particularly badly. The FTSE 100 remains within the range it has established over 2018, and has stayed above its previous low (c.6900). Volatility notwithstanding, the UK market appears attractive as the yields offered by many FTSE 100 companies can offset some of the capital losses being experienced. Value style equities performed well, and outperformed growth equities. Over 4 weeks Asia has enjoyed strong performance relative to other equity markets, and recovered some of its recent losses. Margetts equity holdings have a bias towards value and quality, whereas growth was hit hardest, so our relative performance in this area was very strong. We are watching the US/China trade war, there are no winners in a trade war but China appears better placed to use stimulus packages to offset the negative impacts than the US. The trade war alone seems unlikely to cause too much widespread trouble; isolated pockets of difficulties seem more likely. However, it could combine with an unforeseen headwind to weigh on global growth or sentiment. It seems unlikely that the current plan for Brexit will be voted through Parliament. Concerns that the Backstop arrangement leaves the UK in a customs union that can only be exited with agreement from the EU, and also prevents the UK from negotiating other trade deals seem justified. Strong negotiation from the UK might be able to allay some of these concerns. Strategy We are not making any changes to our strategy this week. remain fairly volatile, and we feel the risk of being out of the market at the moment is greater than the risk of being in the market. When markets change direction quickly, we would rather accept some short term losses, than miss out on a potential recovery.

2 Fund Comments The below charts show the current positions of the fund, the tactical (short term) targets, and the strategic (long term) targets of the fund. We aim to keep the current positions in line with the tactical targets from week to week. The differences between the tactical and strategic targets reflect the views and convictions of the Margetts Investment Committee. Providence Bonds Cash UK Europe ex UK the tactical targets set by the committee. No changes are being made to the tactical targets or current allocations this week. Fund Selection: The underlying bond funds have performed well in Providence over 12 weeks, with only one failing to outperform its IA Sector. The Royal London Short Duration Credit fund has been particularly strong, while the Threadneedle UK Equity Income fund has been the best performing UK Equity Income fund over 4 weeks. The Man GLG UK Income fund has lagged over the very short term, however it has performed strongly over 12 weeks.

3 Select % % % % 1 5.0% Bonds Cash UK Europe ex UK the tactical targets set by the committee. No changes are being made to the tactical targets this week. We have reduced the current allocation to equities, and topped up the UK Equity allocation with the proceeds. Fund Selection: The Jupiter UK Special Situations fund continues to outperform the IA UK All Companies sector, while the SLI UK Equity Income Unconstrained fund has been somewhat weaker over the very short term. The European funds are performing in line with expectations, the more growth oriented fund (BMO European Growth & Income) has lagged slightly in volatile market conditions, while the value biased fund (IP European Equity Income) has performed strongly.

4 International Bonds Cash UK Europe ex UK the tactical targets set by the committee. No changes are being made to the tactical targets or current allocations this week. Fund Selection: The SLI Income fund has outperformed the IA sector over recent months, while the JPM UK Dynamic fund has underperformed over the same period. There are no changes to underlying fund selection being considered at present.

5 Venture % % % 1 5.0% Bonds Cash UK Europe ex UK the tactical targets set by the committee. No changes are being made to the tactical targets this week, while a small sell has been made from Market equities, with the proceeds reallocated to cash, to bring these allocations closer to their targets. Fund Selection: The team are still closely monitoring the Threadneedle fund, which has shown a slight improvement this week. The Stewart Investors Leaders fund has been the strongest underlying Asia holding over recent weeks, the JPM Income fund has also performed well.

6 Important Information Please note that the contents are based on the author s opinion and are not intended as investment advice. This information is aimed at professional advisers and should not be relied upon by any other persons. Any research is for information only, does not constitute financial advice or necessarily reflect the views of the author and is subject to change. It remains the responsibility of the financial adviser to verify the accuracy of the information and assess whether the fund is suitable and appropriate for their customer. Past performance is not a reliable indicator of future performance. The value of investments and the income derived from them can fall as well as rise and investors may get back less than they invested. Important information about the funds can be found in the Supplementary Information Document and NURS-KII Document which are available on our website or on request. Issued by Margetts Fund Management Ltd Margetts Fund Management Limited is authorised and regulated by the Financial Conduct Authority For any information about the company or for a copy of the company's Terms of Business, please contact the company on or at 1 Sovereign Court, Graham Street, Birmingham B1 3JR You can us at admin@margetts.com