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Balanced Portfolio Update - Autumn 2018

24 October 2018

Third quarter performance analysis for the St. James's Place Balanced Portfolio.

The Balanced Portfolio achieved a positive return over the period, boosted by exposure to global equities.

Corporate earnings remained on a strong upward trend in the US, as the boost from Donald Trump’s tax cuts continued to feed into profits and the economy recorded its fastest quarterly growth in nine years. When second quarter corporate earnings were announced, they showed the highest number of companies beating expectations since 2008. While this may be a one-off effect – the administration is not expected to introduce further corporate tax cuts any time soon – it has proved significant for the time being.

The International Equity fund, managed by Magellan, benefited from its exposure to the US and, more importantly, to the technology sector; among the most significant holdings was Microsoft.

Although its rise was relatively steady over the quarter, there was a handful of events that appeared to contribute to positive sentiment, among them the company’s announcement in mid-August that it would roll out a subscription service for Xbox.

Another strong performer in the Portfolio was the Worldwide Opportunities fund, co-managed by Artisan, Burgundy and Select Equity. Select Equity benefited especially from its allocation to the healthcare sector, where it holds Perkinelmer, a US company that focuses on diagnostics and life science research, and Thermo Fisher Scientific, a US biotechnology company. Both companies reported strong second quarter earnings and saw their share prices rise rapidly in response. The quarter opened with the World Cup well under way and, while France took the honours on the pitch, Adidas outdid Nike in shirt sponsor stakes. The company enjoyed a particularly strong quarter on markets too, boosted by encouraging earnings, and acted as a contributor to performance for Select Equity’s part of the fund.

“Adidas has captivated the hearts of consumers globally through endorsements of top teams and this creates a high degree of brand loyalty which enables pricing power. The World Cup provides an opportunity to drive sales for a global audience,” said Brian Vollmer of Select Equity. Emerging markets and UK equities both struggled through the quarter, as reflected in the slightly negative contributions of the UK & General Progressive fund, co-managed by Majedie and Blackrock, and the Emerging Markets Equity fund, managed by Wasatch Advisors.

You may also like to access the full Balanced Portfolio Update.


The price of funds and the income from them may go down as well as up.  You may get back less than the amount invested.

Portfolio fund allocations are not rebalanced automatically. Thus Client Portfolios may not include all of the stocks mentioned in the commentary, as fund allocations may vary between clients, leading to different investment experiences.

The value of an investment with St. James's Place will be directly linked to the performance of the funds selected and the value may fall as well as rise. You may get back less than the amount invested.


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