Model Portfolio Service (MPS) update
Having launched the Model Portfolio Service less than a week after the UK referendum vote to leave the EU, performance of the models has been driven by equity markets, which have continued to push higher while brushing aside a number of political events that saw Donald Trump enter the White House and a snap election in the UK where the Conservative party conceded a majority in parliament. Tensions over the summer between the US and North Korea has more recently caused concern, with Asian and emerging markets continuing to make good progress despite this turbulence in the region. This has been helped in part by a weakening US dollar. Political stability in Europe has helped equities in the continent perform strongly, navigating through the Dutch, French and German elections without too much bother, as well as being boosted by better-than-expected GDP growth.
Key drivers of model performance has therefore come from European (Jupiter European Special Situations), Asian (Schroder Asian Alpha+) and Emerging Market (Fidelity Emerging Markets) equities. During this risk on phase, returns from bonds have understandably been more subdued but still produced useful returns, notably from M&G Optimal Income and our inflation-linked bonds (UK and US), while within our alternatives, strong performance has come from TR Property and 3i Infrastructure.
Since launch we have made a number of trades/asset allocation decisions that have helped boost performance. A couple of examples here include taking profits from our thematic play on energy in October, believing that the outlook for oil had worsened, with the proceeds re-invested into Asian and Emerging Market equities. In April, we added to European equities (reducing UK) ahead of the French election, believing that Marine Le Pen would make the second round run-off but ultimately falling short in her bid for presidency.
This was coupled with our view that economic growth would come through stronger than expected.
Head of DFM Relationship Management
Simon joined Cazenove Capital in 2010 and is Head of DFM Relationship Management. He is responsible for managing Cazenove Capitals relationships with financial adviser clients both within the UK and offshore. He previously spent several years at Rathbone Investment Management where he worked within the UK Intermediaries team for the retail fund area. He has 15 years’ investment experience.
Portfolio Director, Head of DFM Investment Strategy
Steven Rooke is a Portfolio Director having joined in 2005 from State Street Bank. He graduated from the University of East Anglia with a 1st class honours degree in Mathematics and Statistics, and is a Chartered Fellow of the Chartered Institute for Securities & Investments with a Masters in Wealth Management. He is responsible for managing the Model Portfolio Service together with bespoke private client & charity portfolios.
This article is issued by Cazenove Capital which is part of the Schroder Group and a trading name of Schroder & Co. Limited, 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested. This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements. All data contained within this document is sourced from Cazenove Capital unless otherwise stated.