Insights

to help you make informed decisions about your wealth
Menu

Managed Funds Portfolio Update - Spring 2018

21 April 2018

First quarter performance analysis for the St. James's Place Managed Funds Portfolio.

Significant equity exposure proved costly in performance terms for the Managed Funds Portfolio.

One of the developments to cause concern on markets over the first three months of the year was the turn from protectionist rhetoric to protectionist action. Donald Trump followed through on his campaign threats to impose tariffs on certain imports by introducing them for both steel and aluminium. The move prompted retaliatory action from China, which was in turn followed by fresh tariff plans announced by the White House. There was also a rise in tensions between Russia and the West following the poisoning of Sergei Skripal and his daughter in Salisbury.

As a result, investors became increasingly fearful that a fully-fledged trade war might yet take place or, less monumentally, that certain trade-sensitive sectors might particularly suffer. This was felt most strongly within the industrials sector, which was one of the worst-performing sectors over the period. The Managed Growth fund, managed by Schroders, lagged in part due to its allocation to industrials. A holding in Siemens, Europe’s largest industrial manufacturing company, struggled over the quarter as stock-specific factors had a negative impact on the market’s perception of the business.

Siemens’ share price was hit by the planned flotation of its healthcare unit in Frankfurt, and by deals to merge its rail and wind power subsidiaries with more-established competitors. In addition, the German group set the price range for the planned initial public offering of its medical imaging and diagnostics business at a value below market expectations.

Another sector to suffer over the course of the quarter was telecoms, in part due to the broader market downturn, but also as a knock-on from big-name technology troubles, and due to some poor results. The Balanced Managed and Strategic Managed funds both suffered as a result, contributing to broader negative performance for the Portfolio.

Although the Balanced Managed fund, managed by AXA Investment Managers, has a relatively small telecoms allocation, its holding in French telecoms business, Iliad, detracted from performance. The Paris-listed company suffered a share price drop in March when brokers cut their price targets for the provider. The downgrades followed the publication of 2017 results that fell short of expectations. The Strategic Managed fund was hurt by its holding in Telekomunikazi Indonesia, which fell with other Southeast Asian telecoms stocks, partly on fears of trade wars between the US and China.

You may also like to access the full Managed Funds 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.

FTSE International Limited (“FTSE”) © FTSE 2018. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under licence. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Feedback

We value your opinion

We are always looking for ways to improve our service, so if there is something you think we could do better, or that you think we are doing really well, we would love to hear from you.

The only thing we ask is that you do not include any personal information, like account numbers, in your email. If your matter is urgent, needing our personal attention, please contact your local office.

You may be contacted to follow up on your comments.

Complaints

If you wish to complain about any aspect of our service, we will do what we can not only to meet, but exceed your expectations of a swift and thorough resolution. More details of our complaints procedure can be found here.