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Managed Funds Portfolio Update

25 January 2018

Winter Review: Fourth quarter performance analysis for the Managed Funds Portfolio.

The Managed Funds Portfolio delivered a positive return over the quarter.

Stocks in the US enjoyed an exceptionally strong year, as the S&P 500 rose some 20%, but performance in parts of the emerging world was better still. Hong Kong’s Hang Seng index, which hosts a number of listings of large mainland Chinese companies, rose by more than 35% in 2017.

BlackRock, core manager on the Global Equity fund, benefited from the significant emerging market exposure within its equally-weighted mandate. Sands Capital, a satellite manager on the fund, also benefited from emerging markets exposure, notably in India. Maruti Suzuki, an automobile manufacturer; Titan, a luxury goods company; and Eicher Motors, a motorbike manufacturer, all provided major contributions to fund performance over the course of the year.

The International Equity fund also posted high returns across 2017, reflecting its heavy overweight in IT stocks and to consumer discretionary stocks. Magellan, which manages the fund, benefited from holdings in Lowe’s, a US home improvement and appliance chain, and Amazon, the e-retailer.

Returns were more subdued in 2017 for the Managed Growth fund, which is managed by Schroders, but still made a positive contribution to Portfolio performance.  The fund reduced its allocation to equities and cash in favour of high yield credit. It benefited from an underweight to the materials sector and, specifically, its holding in SCA, a Swedish timber, pulp and paper manufacturer; while holdings in Centrica, Pearson and Debenhams detracted over the quarter.

Despite the significant rise in the oil price over the course of the year, energy stocks struggled – the S&P 500 Energy Index finished 2017 marginally down. The Strategic Managed fund, which is managed by Threadneedle, benefited from its low exposure to energy and materials stocks, but returns were held in check by lack of exposure to IT stocks.

Gains in emerging markets were not restricted to equities – bonds also performed well. BlueBay, which co-manages the Strategic Income fund, saw its credit holdings benefit from the broader rise in credit prices, the growing normalisation of Fed interest rate policy, sustained global growth and rising inflation expectations.

You may also like to access the full Managed Funds Portfolio Update.


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.

© S&P Dow Jones LLC 2018; all rights reserved


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