P O R T FO LIO O B J ECT IV E The Portfolio aims to achieve long-term capital growth by investing in a diversified range of asset classes. The Portfolio is matched to a risk profile (level 7) which targets a specific range of volatility (see the Volatility Target) and will invest around 60% to 80% in equities, with the remainder in fixed interest, property and cash. Q UA R T ER LY UP D A T E - Q 1 2 0 1 8 MAR KET VO LAT ILIT Y H AS R ET U R N ED : H O LD T IG H T P LEAS E! Company share and bond markets suffered a torrid first quarter. In just three short months, they went from performing well on the back of positive economic numbers and investor sentiment in 2017 to selling off, twice. First it was fears of the economy overheating and inflation suddenly picking up, and then it was fears of an economic slowdown brought on by President Trump s latest political initiatives, namely sparking an international trade war and, quite separately, threatening Amazon. Times like these underline just why we build and manage diversified portfolios. This approach may have cost us some of the po tential gains we might have enjo yed in 2017 by o pting fo r full equity expo sure, but it s helped to pro tect the value o f o ur clients savings in the first quarter o f this year. And it s likely to co ntinue do ing so as the year go es o n. We expect to see many mo re po ckets o f vo latility suddenly o pening up this year as investo rs attempt to digest a number o f major issues. For the UK, Brexit uncertainty will remain a constant companion. Despite the transition deal announced in March, the real test wo n t co me until Octo ber when EU natio ns have to agree terms ready to ratify a deal in March o f 2019. With politicians from 27 different countries all being offered the chance to make a name for themselves, it s highly unlikely that we ll pass this milestone without significant upheaval. At the same time, we wait to see ho w Mr T rump s trade war develo ps, whether he impo ses strict new regulatio ns o n the mo no liths o f the tech secto r and, no t least, ho w his pro mised tax cuts and fiscal stimulus will impact the US and o ther markets. Only three months ago, investors were more worried about G ermany s latest coalition government, the coming Italian election and the continued belligerence of North Korea. Although these concerns were very real at the time, they seem remo te no w. As the o pening mo nths o f 2018 have already demo nstrated, this is no time fo r po rtfo lio managers to hit it and ho pe. P O R T FO LIO INFO R MA T IO N WEIG H T ED O C F 0.70% VO LAT ILIT Y T AR G ET 12.89% - 14.57% P O R T FO LIO MA NA G ER ST UART CLARK As Portfolio Manager Stuart has responsibility for both leading the research supporting the WealthSelect fund range and for running the Managed Portfolios, being accountable for all portfolio management decisions. Prior to joining Old Mutual Stuart was an Executive Director at Julius Baer responsible for mutual fund due diligence and has held similar roles at Merrill Lynch Wealth Management, UBS and BDO Investment Management. Stuart is a CFA Charter ho lder. T he clear message o f the first quarter is that the future is unlikely to lo o k much like the past. Whether that s a go o d thing o r not, only time will tell. P ER FO R MA NCE INFO R MA T IO N S INCE 3 1 /1 2 /2 0 1 2-0 7/0 7/2 0 1 8 80.0 60.0 40.0 20.0 0.0-20.0 2013 2014 2015 2016 2017 2018 CUMULA T IV E PERFORMANCE 3 MONTH 6 MONTH 1 YEAR 3 YEAR SINCE LAUNCH (24/0 2/20 14-0 7/0 7/20 18) 2.96% -1.34% 4.76% 25.05% 41.25% Page 1 o f 6
D IS CRET E Q UA R T ER LY PERFORMANCE TO 30 S EP T EMB ER TO 31 D ECEMB ER TO 31 MA R CH TO 30 J UNE 2 0 1 7 2 0 1 7 2 0 1 8 2 0 1 8 1.65% 3.03% -3.48% 4.05% Past perfo rmance is no t a guide to the future. T he value o f investments can fall as well as rise and investo rs may no t get back the full amount invested. Please note that performance prior to 24 February 2014 is attributed to a portfolio composition using an equally weighted split between each retail equivalent share class of the WealthSelect fund within each sub asset class. The Strategic Asset Allocation follows the Towers Watson quarterly review process implemented on the platform. This synthesized past performance is for illustrative purposes only. Performance from 24 February 2014 is attributed to the live Managed Portfolio utilising the WealthSelect specific share classes launched on this date. The weighted OCF shown for this portfolio excludes the Old Mutual Global Equity Absolute Return fund's Performance Related Fee (PRF). T he estimated PRF fo r Old Mutual G lo bal Equity Abso lute Return fund is 1.20%. T his fee is an estimate o nly and not a forecast or guarantee. The weighted OCF shown for this portfolio excludes the Old Mutual Absolute Return Government Bond fund's Performance Related Fee (PRF). T he estimated PRF fo r Old Mutual Abso lute Return G o vernment Bo nd fund is 0.54%. T his fee is an estimate only and not a forecast or guarantee. Please note for transparency Old Mutual Wealth shows the Total Expense Ratio (TER) including the estimated PER and PRF where relevant on personalised illustrations. Page 2 o f 6
Sterling Strategic Bond 1.83% 0.01% Gilt 1.86% 0.01% Property 2.4 4 % 0.01% Emerging Market Equity 3.11% -- 0.02% Other 3.37 % 0.01% Japan Equity 4.4 1% -- 0.11% Absolute Return Fixed Income 5.08% 0.02% European Equity 6.68% 0.03% Far East Equity 10.10% -- 0.19% Sterling Corporate Bond 1.4 8% 0.01% Cash 11.94 % 0.05% Global Specialist 18.7 7 % 0.12% UK Equity 15.36% -- 0.05% North American Equity 13.59% 0.09% A S S ET A LLO CA T IO N A ND FUND S GLOBAL SPECIALIST 18.7711% Quilter Investors Global Equity Value Fund U2 (GBP) Quilter Investors Global Equity Absolute Return Fund U2 (GBP) Acc Quilter Investors Precious Metals Equity Fund U2 (GBP) 7.2225% 6.9018% 4.6468% UK EQUITY 15.3555% Quilter Investors UK Equity Large-Cap Income Fund U2 (GBP) Quilter Investors UK Equity Growth Fund U2 (GBP) 4.3118% 3.0683% Quilter Investors UK Equity Fund U2 (GBP) Acc 3.0298% Quilter Investors UK Equity Opportunities Fund U2 (GBP) 2.9423% Quilter Investors UK Equity Income Fund U2 (GBP) Acc 2.0032% ABSOLUTE RETURN FIXED INCOME 5.0755% Old Mutual Absolute Return Government Bond Fund W GBP Accum 5.0755% JAPAN EQUITY 4.4064% Quilter Investors Japanese Equity Fund U2 (GBP) 4.4064% OTHER 3.3681% Quilter Investors Emerging Markets Equity Fund U2 (GBP) Acc 1.6560% Quilter Investors Corporate Bond Fund U2 (GBP) Acc 0.9701% Quilter Investors Europe (ex UK) Small/Mid-Cap Equity Fund U2 (GBP) Acc 0.7420% EMERGING MARKET EQUITY 3.1062% Quilter Investors Emerging Markets Equity Growth Fund U2 (GBP) Quilter Investors Emerging Markets Equity Income Fund U2 (GBP) Acc 1.7024% 1.4039% Page 3 o f 6
NORTH AMERICAN EQUITY 13.5859% Quilter Investors North American Equity Fund U2 (GBP) Acc 6.7787% Quilter Investors US Equity Income Fund U2 (GBP) Acc 2.3929% Quilter Investors US Equity Small/Mid-Cap Fund U2 (GBP) Quilter Investors US Equity Growth Fund U2 (GBP) 2.3723% 2.0420% CASH 11.9356% BlackRock Cash Fund Class OS GBP Acc 11.9356% FAR EAST EQUITY 10.1040% Quilter Investors Asia Pacific (ex Japan) Large-Cap Equity Fund U2 (GBP) Quilter Investors Asia Pacific (ex Japan) Equity Fund U2 (GBP) 3.8505% 3.7915% Quilter Investors Asia Pacific Fund U2 (GBP) Acc 1.4868% Quilter Investors China Equity Fund U2 (GBP) 0.9752% PROPERTY 2.4386% Janus Henderson UK Property PAIF Feeder Fund U2 Acc 2.4386% GILT 1.8598% Quilter Investors Gilt Index Fund U2 (GBP) 1.8598% STERLING STRATEGIC BOND 1.8326% Quilter Investors Sterling Diversified Bond Fund U2 (GBP) 1.1212% Quilter Investors Diversified Bond Fund U2 (GBP) Acc 0.7114% STERLING CORPORATE BOND 1.4766% Quilter Investors Investment Grade Corporate Bond Fund U2 (GBP) Quilter Investors Sterling Corporate Bond Fund U2 (GBP) 0.9658% 0.5108% Total: 100% EUROPEAN EQUITY 6.6841% Quilter Investors Europe (ex UK) Equity Fund U2 (GBP) Quilter Investors Europe (ex UK) Equity Growth Fund U2 (GBP) Quilter Investors Europe (ex UK) Equity Income Fund U2 (GBP) 3.3355% 1.6787% 1.6699% Asset allocation is based on the Towers Watson sub-asset classes used as part of Old Mutual Wealth s asset allocation process. The asset allocations shown above are dynamic, based on the daily price movements of the underlying funds. Clients entering this Managed Portfolio for the first time, either via new business or a switch, will have their asset allocation based on the strategic asset allocation determined at the last quarterly review date and available on our adviser website. Page 4 o f 6
S ECT O R B R EA K D O WN T O P 1 0 Financial Services T e chnology Basic Materials Consumer Cyclical Industrials Consumer Defensive He althcare Ene rgy Communication Services Real Estate Utilitie s (% ) 8.04% 6.77% 6.47% 6.04% 5.10% 3.89% 3.06% 2.74% 1.72% 1.10% 0.65% Data is sho wing the breakdo wn o f the to p 10 equity secto rs o nly as a pro po rtio n o f the to tal po rtfo lio. G EO G R A P HIC B R EA K D O WN T O P 1 0 United Kingdom United States Japan Canada China France Ne the rlands Ge rmany Australia India (% ) 14.88% 8.33% 4.86% 2.70% 2.68% 1.75% 1.53% 1.49% 1.48% 1.41% Data is sho wing the breakdo wn o f the to p 10 co untries by equity ho ldings o nly as a pro po rtio n o f the to tal po rtfo lio. Page 5 o f 6
For an explanation of any investment terms you can view our glossary at www.oldmutualwealth.co.uk/glossary or consult your Financial Adviser. IMP O R T AN T IN FO R MAT IO N All performances are inclusive of any net reinvested income. Performance figures are as at 07/07/2018. A minority of funds also feature a performance related fee which is not shown here. Source: Morningstar. The value of investments and the income from them can fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amo unt invested. Past perfo rmance is no t a guide to the future. All investments carry risks and knowing what they are can help you manage them. You ll find information about some of them within this report but for a full understanding of investment risk view our Understanding risk brochure available at www.o ldmutualwealth.co.uk/risk IN FO R MAT IO N S O U R C E: MO R N IN G S T AR The Morningstar sourced information is provided to you by Old Mutual Wealth and is used at your own risk. Morningstar take care to ensure that the information provided is correct. Neither Morningstar or Old Mutual Wealth warrants, represents nor guarantees the contents of the information, nor do they accept any responsibility for error, inaccuracies, omissions or any inconsistencies herein. Calls may be monitored and recorded for training purposes and to avoid misunderstandings. Old Mutual Wealth is the trading name of Old Mutual Wealth Limited which provides an Individual Savings Account (ISA) and Collective Investment Account (CIA) and Old Mutual Wealth Life & Pensions Limited which provides a Collective Retirement Account (CRA) and Collective Investment Bond (CIB). The WealthSelect Managed Portfolio Service is provided by Old Mutual Wealth Limited and Old Mutual Wealth Life & Pensions Limited. Old Mutual Wealth Limited and Old Mutual Wealth Life & Pensions Limited are registered in England and Wales under numbers 1680071 and 4163431 respectively. Registered Office at Old Mutual Ho use, Po rtland T errace, So uthampto n SO14 7EJ, United Kingdom. Old Mutual Wealth Limited is authorised and regulated by the Financial Conduct Authority. Old Mutual Wealth Life & Pensions Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Their Financial Services register numbers are 165359 and 207977 respectively. VAT number 386 1301 59. Page 6 o f 6