PROTECT AND PROFIT THROUGH VIGILANCE

Transcription

1 PROTECT AND PROFIT THROUGH VIGILANCE Q2-2017

2 OUR ETHOS: Deliver with honour. Behave with integrity. Protect and Profit through vigilance. That requires some

3 FOREWORD From day 1, our aim has been to set industry leading standards for investment management. We are dedicated to providing institutional quality investments to retail clients of any wealth. Yes, that means you. Our investment team have access to portfolio management systems which, for far too long, have been available only to institutions, the big hitters, the priviliged few. Our portfolios now deliver this advantage to you. It s time every investor had that same advantage; to receive transparent, honourable, tangible results - to demand vigilance when faced with market threats - to expect their interests to be at the heart of every investment decision - in a relationship built on integrity. Your investment comes first, before we profit, that s important to us. We provide the same benefits for a 1,000 investment as a 10,000,000 investment. We also take care of risks your current investments may be exposed to......we protect you from movements in the foreign exchange markets. See Page 6 to find out more about the impact of foreign exchange markets on your portfolio - a topic which few advisers warn you about. Page 1

4 VIGILANCE Our team of investment professionals monitor the financial markets 24/7, every trading day of the year, to be sure your investments stay ahead of the curve. Now your portfolio can be managed through the most sophisticated systems in our industry. Software trusted with $17trillion of client assets every single minute of every single day, monitoring your portfolio in ways that are unparalleled in our industry. Through our strategic relationships Tavistock Wealth can provide this benefit to you. The proof is always in the pudding: ACUMEN Conservative Portfolio BENCHMARK IA Mixed Investment 20-60% Shares O N D J F M A M J J A S O N D J F M A M J J A S O N D J FM Page 2 Date of data : 31st March 2017

5 Our expertise is in portfolio construction and risk management. Our flagship offering is the ACUMEN Portfolio range. ACUMEN protects you using industry-leading portfolio management tools, mitigating all types of unwanted risk within your investment. Your money will be managed across multi-asset markets investing in a combination of assets classes, for example equities, bonds, commodities and property. ACUMEN Portfolios form the core of our investment offering. We blend these together to create model portfolios for our clients. Model portfolios are designed to cater for varying risk appetites of clients. Certain levels of risk are too high for some clients and too low for others. There will be a match to your attitude to risk. JUDGE OUR PERFORMANCE FOR YOURSELF Return over the last 12 months ACUMEN Conservative Portfolio ACUMEN Income Portfolio ACUMEN Pr0gressive Portfolio ACUMEN Adventurous Portfolio 14.11% 14.59% 16.21% 16.16% Date of data : 31st March 2017 Page 3

6 ACCESS TO MODEL PORTFOLIOS WITH A CONSISTENT 9-YEAR TRACK RECORD Greater than the tread of mighty armies is an idea whose time has come. Victor Hugo Page 4

7 The value of an investment in the ACUMEN Portfolios may fall as well as rise. Past performance should not be seen as an indication of future performance. Source of data: Tavistock Wealth Limited, Thomson Reuters and Lipper for Investment Management unless otherwise stated. Government Bonds Corporate Bonds UK Equities Overseas Equities Specialist Equities Commodity Equities Property Cash UK Europe ex UK North America Japan Asia ex Japan Rest of World The value of an investment in the Acumen Portfolios may fall as well as rise. Past performance should not be seen as an indication of future performance. Source of data: Tavistock Wealth Limited, Thomson Reuters and Lipper for Investment Management unless otherwise stated. *Dividend yield as of 28/02/17. Government Bonds Corporate Bonds UK Equities Overseas Equities Commodity Equities Cash UK Europe ex UK North America Japan Asia ex Japan Rest of World The value of an investment in the Acumen Portfolios may fall as well as rise. Past performance should not be seen as an indication of future performance. Source of data: Tavistock Wealth Limited, Thomson Reuters and Lipper for Investment Management unless otherwise stated. Government Bonds Corporate Bonds UK Equities Overseas Equities Specialist Equities Commodity Equities Property Cash UK Europe ex UK North America Japan Asia ex Japan Rest of World The value of an investment in the Acumen Portfolios may fall as well as rise. Past performance should not be seen as an indication of future performance. Source of data: Tavistock Wealth Limited, Thomson Reuters and Lipper for Investment Management unless otherwise stated. Government Bonds Corporate Bonds UK Equities Overseas Equities Specialist Equities Commodity Equities Property Cash UK Europe ex UK North America Japan Asia ex Japan Rest of World A REVOLUTION in investment management The ACUMEN Portfolios are the building blocks of your revolution. ACUMEN Conservative Portfolio ACUMEN Income Portfolio ACUMEN Progressive Portfolio ACUMEN Adventurous Portfolio PORTFOLIO FACTSHEET MARCH For Use By Professional Intermediaries Only PORTFOLIO FACTSHEET MARCH For Use By Professional Intermediaries Only PORTFOLIO FACTSHEET MARCH For Use By Professional Intermediaries Only PORTFOLIO FACTSHEET MARCH For Use By Professional Intermediaries Only Income Target Income Paid* 3.50% % 3.84% MANAGER COMMENTARY The ACUMEN Conservative Portfolio returned 0.02% in March and the IA Mixed Investment 20-60% Shares sector rose 0.79%. The portfolio has a rolling 1-year return of 14.11%. Financial markets around the globe were little changed during the month of March, despite a number of significant political developments. As expected, Prime Minister Theresa May formally began the Brexit process by triggering Article 50 and the UK will be leaving the European Union in The government has a very strong hand to play during the negotiations and there is every reason to believe that the UK economy will successfully navigate the divorce proceedings and emerge stronger. Volatility in markets is likely to be heightened during the early stages of the talks, but eventually the improving economic fundamentals around the world will reassert themselves in the minds of investors. The UK markets took the news in their stride and the FTSE 100 rose 0.82% and sterling climbed to the higher end of its six-month trading range versus the US dollar at In the US, President Donald Trump suffered a minor setback in failing to repeal Obamacare, but he remains on course to announce his tax reform policies and a one trillion dollar infrastructure plan in early April. The Trump rally came to a halt in March as the DJIA fell -0.72%. Given the administration s pro-growth agenda, this modest decline represents only a minor correction in the eight-year bull market. Elsewhere, the MSCI World rose 0.82% and equity markets in Asia were mixed. The Nikkei 225 fell -1.10% and the Hang Seng gained 1.56%. Commodity prices were relatively subdued with the exception of crude oil, which fell -6.31% to $50.60 per barrel. Inflation in the UK and US has very quickly risen above the 2% level, which foreshadows bad news for bondholders. A reduction in duration is the only way to mitigate losses in the current environment and this is the policy we have adopted across all of our portfolios. TOP 5 ETF HOLDINGS ishares Corporate Bond 0-5yr ETF ishares Corporate Bond Ex-Financials ETF ishares Global High Yield Corp Bond ETF ishares J.P. Morgan $ Emer Mkts Bd ETF ishares UK Gilts 0-5yr ETF The top 5 ETF holdings comprise 57% of the portfolio INVESTMENT POLICY The investment policy of the ACUMEN Conservative Portfolio is to gain exposure through investment in a diversified portfolio comprised of passive index tracking regulated collective investment schemes (ETFs) and cash. The minimum bond and/or cash exposure is 30% and equity exposure ranges between 20-60%. March 2017 Return ASSET ALLOCATION 2% 2% 5% 5% 28% 10% 9% 39% % REGION ALLOCATION % 4% 2% 21% 14% 10% 0.02% 49% Year : 1.63% Rolling 1-Year to Date Return : 14.11% MANAGER COMMENTARY The ACUMEN Income Portfolio returned 0.80% in March and outperformed the IA Mixed Investment 20-60% Shares sector, which rose 0.79%. The portfolio has a rolling 1-year return of 14.59%. Financial markets around the globe were little changed during the month of March, despite a number of significant political developments. As expected, Prime Minister Theresa May formally began the Brexit process by triggering Article 50 and the UK will be leaving the European Union in The government has a very strong hand to play during the negotiations and there is every reason to believe that the UK economy will successfully navigate the divorce proceedings and emerge stronger. Volatility in markets is likely to be heightened during the early stages of the talks, but eventually the improving economic fundamentals around the world will reassert themselves in the minds of investors. The UK markets took the news in their stride and the FTSE 100 rose 0.82% and sterling climbed to the higher end of its six-month trading range versus the US dollar at In the US, President Donald Trump suffered a minor setback in failing to repeal Obamacare, but he remains on course to announce his tax reform policies and a one trillion dollar infrastructure plan in early April. The Trump rally came to a halt in March as the DJIA fell -0.72%. Given the administration s pro-growth agenda, this modest decline represents only a minor correction in the eight-year bull market. Elsewhere, the MSCI World rose 0.82% and equity markets in Asia were mixed. The Nikkei 225 fell -1.10% and the Hang Seng gained 1.56%. Commodity prices were relatively subdued with the exception of crude oil, which fell -6.31% to $50.60 per barrel. Inflation in the UK and US has very quickly risen above the 2% level, which foreshadows bad news for bondholders. A reduction in duration is the only way to mitigate losses in the current environment and this is the policy we have adopted across all of our portfolios. TOP 5 ETF HOLDINGS ishares Corporate Bond 0-5yr ETF ishares Core FTSE 100 ETF ishares Global High Yield Corp Bond ETF ishares Global Infrastructure ETF ishares UK Dividend ETF The top 5 ETF holdings comprise 69% of the portfolio INVESTMENT POLICY The investment policy of the ACUMEN Income Portfolio is to gain exposure through investment in a diversified portfolio comprised of passive index tracking regulated collective investment schemes (ETFs) and cash. The minimum bond and/or cash exposure is 30% and equity exposure ranges between 20-60%. March 2017 Return ASSET ALLOCATION % REGION ALLOCATION % Year to Date : 2.70% 4% 1% 2% 10% 8% 7% 42% 31% 19% 12% 16% 0.80% 48% Rolling 1-Year Return : 14.59% MANAGER COMMENTARY The ACUMEN Progressive Portfolio returned 0.23% in March and the IA Mixed Investment 40-85% Shares sector rose 1.00%. The portfolio has a rolling 1-year return of 16.21%. Financial markets around the globe were little changed during the month of March, despite a number of significant political developments. As expected, Prime Minister Theresa May formally began the Brexit process by triggering Article 50 and the UK will be leaving the European Union in The government has a very strong hand to play during the negotiations and there is every reason to believe that the UK economy will successfully navigate the divorce proceedings and emerge stronger. Volatility in markets is likely to be heightened during the early stages of the talks, but eventually the improving economic fundamentals around the world will reassert themselves in the minds of investors. The UK markets took the news in their stride and the FTSE 100 rose 0.82% and sterling climbed to the higher end of its six-month trading range versus the US dollar at In the US, President Donald Trump suffered a minor setback in failing to repeal Obamacare, but he remains on course to announce his tax reform policies and a one trillion dollar infrastructure plan in early April. The Trump rally came to a halt in March as the DJIA fell -0.72%. Given the administration s pro-growth agenda, this modest decline represents only a minor correction in the eight-year bull market. Elsewhere, the MSCI World rose 0.82% and equity markets in Asia were mixed. The Nikkei 225 fell -1.10% and the Hang Seng gained 1.56%. Commodity prices were relatively subdued with the exception of crude oil, which fell -6.31% to $50.60 per barrel. Inflation in the UK and US has very quickly risen above the 2% level, which foreshadows bad news for bondholders. A reduction in duration is the only way to mitigate losses in the current environment and this is the policy we have adopted across all of our portfolios. TOP 5 ETF HOLDINGS ishares Core FTSE 100 ETF ishares FTSE 250 ETF ishares J.P. Morgan $ Emer Mkts Bd ETF ishares MSCI World GBP Hedged ETF ishares S&P 500 GBP Hedged ETF The top 5 ETF holdings comprise 55% of the portfolio INVESTMENT POLICY The investment policy of the ACUMEN Progressive Portfolio is to gain exposure through investment in a diversified portfolio comprised of passive index tracking regulated collective investment schemes (ETFs) and cash. There is no minimum exposure to bonds and/or cash and the equity exposure ranges between 40-85%. March 2017 Return ASSET ALLOCATION % REGION ALLOCATION % 4% 10% 5% 29% 0.23% 2% 10% 10% 5% 12% 6% 29% 41% Year Rolling 1-Year to Date : 3.37% Return : 16.21% 11% 26% MANAGER COMMENTARY The ACUMEN Adventurous Portfolio returned 0.38% in March and the IA Flexible Investment sector rose 1.05%. The portfolio has a rolling 1-year return of 16.16%. Financial markets around the globe were little changed during the month of March, despite a number of significant political developments. As expected, Prime Minister Theresa May formally began the Brexit process by triggering Article 50 and the UK will be leaving the European Union in The government has a very strong hand to play during the negotiations and there is every reason to believe that the UK economy will successfully navigate the divorce proceedings and emerge stronger. Volatility in markets is likely to be heightened during the early stages of the talks, but eventually the improving economic fundamentals around the world will reassert themselves in the minds of investors. The UK markets took the news in their stride and the FTSE 100 rose 0.82% and sterling climbed to the higher end of its six-month trading range versus the US dollar at In the US, President Donald Trump suffered a minor setback in failing to repeal Obamacare, but he remains on course to announce his tax reform policies and a one trillion dollar infrastructure plan in early April. The Trump rally came to a halt in March as the DJIA fell -0.72%. Given the administration s pro-growth agenda, this modest decline represents only a minor correction in the eight-year bull market. Elsewhere, the MSCI World rose 0.82% and equity markets in Asia were mixed. The Nikkei 225 fell -1.10% and the Hang Seng gained 1.56%. Commodity prices were relatively subdued with the exception of crude oil, which fell -6.31% to $50.60 per barrel. Inflation in the UK and US has very quickly risen above the 2% level, which foreshadows bad news for bondholders. A reduction in duration is the only way to mitigate losses in the current environment and this is the policy we have adopted across all of our portfolios. TOP 5 ETF HOLDINGS ishares Core FTSE 100 ETF ishares FTSE 250 ETF ishares S&P 500 GBP Hedged ETF ishares UK Dividend ETF ishares UK Property ETF The top 5 ETF holdings comprise 55% of the portfolio INVESTMENT POLICY The investment policy of the ACUMEN Adventurous Portfolio is to gain exposure through investment in a diversified portfolio comprised of passive index tracking regulated collective investment schemes (ETFs) and cash. There is no minimum exposure to bonds and/or cash and the maximum equity exposure is 100%. March 2017 Return ASSET ALLOCATION 2% 7% 7% 5% 15% 10% % REGION ALLOCATION % Year to Date : 3.53% 22% 17% 7% 8% 19% 0.38% 32% 34% 1% 48% Rolling 1-Year Return : 16.16% YOUR PORTFOLIO You can benefit from our 5 star service Page 5

8 WHY WORRY ABOUT THE FOREIGN EXCHANGE MARKETS? If your portfolio invests across the globe you will be exposed to the currency markets. If this exposure is not properly managed (known as hedging), any significant movement in other currencies could wipe out all gains in a heartbeat! As an example Sterling (GBP) fell 10% within a day of the Brexit announcement! Are your investments currency hedged? - What happens if GBP bounces back? How much would you lose? An example of how an UNHEDGED investment could affect you: Say you hold an investment in an American stock market such as the S&P 500. The investment you make, as a UK investor, would be in GBP. The underlying investments to which you have exposure are held in USD. Say over a 6 month period the S&P returns +5%. You therefore make a +5% gain in USD terms. However, the return you actually receive is not only based on what the S&P 500 has done. Crucially, it also depends on what the currency movement has been between GBP and USD over that same 6 month period. If GBP has appreciated by 10% versus the USD over that period... (and in 2015 it appreciated by +8.5% between 10 April and 19 June),...then even though the return of the S&P 500 was +5%, you would suffer a loss of -4.55%. Of course, if the S&P investment were to go down in value and the GBP appreciate, then your losses become magnified. Unhedged investments expose people to significantly increased risk because they are affected by market moves that are not part of their intended strategy. The currency market is one of the most volatile of all financial markets and we believe care should be taken to minimise your exposure to this risk wherever possible. Page 6 We believe that hedging results in a portfolio that is significantly safer because it is more likely to stay in line with your risk appetite.

9 UNHEDGED HEDGED You are exposed to currency risk, causing your return to differ from the market You are protected from currency risk, meaning your return will match the market investment in GBP (unhedged) American Stock Market investment in GBP (hedged) American Stock Market 10/04/2015 to 31/12/ /04/2015 to 31/12/2015 When your overseas exposure is UNHEDGED: You could make MORE OR LESS than the American stock market because Your returns ARE being impacted by movements in the foreign exchange markets therefore whatever your attitude to risk, you are exposed to the WRONG type of risk within your portfolio When your overseas exposure is HEDGED: You will make THE SAME as the American stock market because Your returns ARE NOT being impacted by movements in the foreign exchange markets therefore whatever your attitude to risk, you are exposed to the RIGHT type of risk within your portfolio WE SHOULD ALL WORRY ABOUT THE FOREIGN EXCHANGE MARKETS! Page 7

10 PROTECT AND PROFIT with HONOUR, INTEGRITY AND VIGILANCE. Page 8

11 Thinking is the hardest work there is, which is probably the reason so few engage in it. Henry Ford Page 9

12 Every revolution was first a thought in one man s mind. Victor Hugo This document is for informational purposes only and does not constitute financial advice. If you require financial advice you should speak to a qualified financial adviser. The value of investments held in the ACUMEN Portfolios may fall as well as rise. Past performance should not be seen as an indication of future performance. Tavistock Wealth Limited is authorised and regulated by the Financial Conduct Authority. Tavistock Wealth Limited is a wholly owned subsidiary of Tavistock Investments Plc. Tavistock Wealth Limited, Unit 1, Bracknell Beeches, Bracknell, Berks, RG12 7BW +44 (0)